Pensions

Last updated:

Allocation FAQS

What is allocation?
When do I make my decision on allocating my pension?
Are there other circumstances when an application can be made?
Who can I nominate as my beneficiary?
I intend to allocate pension to my spouse or registered civil partner or nominated partner.  Is this pension replacing the standard survivor pension?
If my beneficiary dies before me, can the allocation be cancelled?
How do I apply to allocate pension?
Am I required to have a medical examination to demonstrate that I am in good health?
Is my beneficiary required to have a medical examination?
How much of my pension can I allocate?
What is the Guaranteed Minimum Pension?
How much additional pension will my beneficiary receive? 

What is allocation?

Allocation is the ability to give up (allocate) part of your pension to provide a pension, payable after your death, to a dependant.

 

When do I make my decision on allocating my pension?

You must apply for allocation when making your claim for payment of retirement benefits or payment of preserved benefits, i.e. before the pension is put into payment.

 

Are there other circumstances when an application can be made?

Yes.  You can apply to allocate pension if you are in pensionable employment and:

  • You have completed 45 years’ of pensionable service, or
  • You are a doctor with MHO status who is over age 55 and has completed 40 years’ of pensionable service, or
  • You have reached age 65 (age 60 for MHOs)
    At the time of making your allocation you need to be in good health.

 

Who can I nominate as my beneficiary?

The nomination must be in favour of a spouse, civil partner, nominated partner or someone who is dependent on you for financial support.   The nominated beneficiary does not need to be a relative.

 

I intend to allocate pension to my spouse or registered civil partner or nominated partner.  Is this pension replacing the standard survivor pension?

No.  The allocated pension is paid in addition to any standard survivor benefits. 

 
If my beneficiary dies before me, can the allocation be cancelled?

No.  Once the allocation has been accepted it cannot be amended or cancelled.  If your nominated beneficiary dies before you then the allocated pension is lost.

 

How do I apply to allocate pension?

 

Am I required to have a medical examination to demonstrate that I am in good health?

Yes, and you are responsible for any costs that you may incur. You are required to be in good health for your age. 

  • If you are contributing to the NHS pension scheme (England and Wales) you need to have a medical examination performed by your GP.
  • If you are contributing to the NHS Superannuation Scheme (Scotland) you need to arrange for your GP to complete ‘NHS:ALLOC MED 2’ form.
  • If you are contributing to the HSC Pension Scheme (Northern Ireland), you will be advised where you need to go to attend a medical examination.

 

Is my beneficiary required to have a medical examination?

No.  It is not necessary for the beneficiary to be medically examined because the allocated pension is lost if your beneficiary predeceases you.

 

How much of my pension can I allocate?

You can allocate up to one third of your pension, but you must:

  • give up an exact number of pounds, and
  • your residual pension must be greater than your Guaranteed Minimum Pension, (GMP) and
  • you must be left with more pension than your beneficiary.

    In respect of your beneficiary, you must provide:
  • an additional annual pension of at least £260 for your beneficiary, and
  • a beneficiary’s pension which exceeds 1% of the standard lifetime allowance. 

 

What is the Guaranteed Minimum Pension?

If you were contributing to the NHS pension scheme between 6 April 1978 and 5 April 1997 you might have been contracted out of the State Earnings Related Pensions Scheme (SERPS).  SERPS is the earnings related tier of the state pension now known as the State Second Pension (S2P). 
Contracting out is a requirement for all members of the NHS pension scheme other than self employed contractors. Contracting out continues to apply today although the accrual of GMP benefits finished on 5 April 1997.

If you were contracted out of SERPS you were entitled to pay a lower rate of national insurance contributions.
As a result of contracting out, the NHS pension scheme guarantees that at State pension age the benefits from the scheme will be at least as much as the additional pension that would have received from the State had you remained within SERPS and not been contracted out. This is known as the GMP element of your pension.

 

How much additional pension will my beneficiary receive?

The amount of pension available to your beneficiary in respect of each £1 allocated depends on the following factors:

  • Your age
  • Your beneficiary’s age
  • Your beneficiary’s gender.
    The pensions agencies will confirm the amounts available. The amount is index-linked when it is put into payment post the donor's death.