Transferring money out of the NHS pension scheme

This guidance sets out why and how you may want to transfer your pension benefits from the NHS pension scheme into another scheme, depending on where you are in your career.

Location: UK
Audience: All doctors
Updated: Monday 7 September 2020
Piggybank illustration

Transferring benefits in and out of the NHS pension scheme

  • You are able to transfer your benefits in and out of the NHS pension scheme.
  • There are restrictions on the type of transfers available and time limits which apply.
  • Benefits can be transferred into the scheme if the application to do so is made within 12 months of joining the scheme.
  • Applications also to be made before the normal pension age of the section of the NHS pension scheme to which you belong.
  • Benefits can generally be transferred out of the scheme at any time before your normal pension age.
  • ​If it is before your pension age and you have less than two years NHS pensionable service, you must join the receiving scheme and initiate the transfer within 12 months of leaving the NHS.

 

Moving to a different UK nation

In order to ensure that your pension from your current employment fully reflect all your pensionable service you should consider transferring your service.

There are three separate NHS pension schemes; one for England and Wales, one for Scotland and one for Northern Ireland.

You will need to actively apply to transfer your pension to your new pension scheme within 12 months of moving.

Apply to transfer:

If you are transferring from the 1995 section of the scheme in one nation to the 1995 section of the scheme in another nation you will be credited with day for day service. The same is true if you are transferring from the 2008 section of the scheme in one nation to the 2008 section of the scheme in another.

If you are transferring from the 1995 section to the 2008 section the transfer will be calculated on a cash equivalent basis.

 

Transferring your NHS pension abroad

 

How to apply for a transfer out

  • Ask your new registered scheme to write to your previous pensions agency to initiate a transfer (advising them of the time limits), or write directly to them yourself .
  • If the transfer is possible, a CETV (cash equivalent transfer value) will be provided.
  • The new scheme administrators will be able to advise on the level of benefits this will acquire in the new scheme.
  • You are not committed to proceeding with the transfer as a result of having asked for a transfer value. This is your opportunity to decide whether a transfer is in your interests.  

 

Public Sector Transfer Club

Certain public sector schemes are members of what is known as the Public Sector Transfer Club (participating schemes are known as ‘club schemes’). There are strict time limits for ‘club’ transfers which must be applied for within 12 months of joining the new club scheme.

A special calculation is used in the club transfer process which is often more favourable than that used for non-club schemes. Transfers between club schemes generally provide broadly equivalent benefits in the new scheme, regardless of any increase in salary on moving.

However, the calculation allows for any differences in the structure of the schemes, eg, a different normal pension age, so the amount of pensionable service offered in the new scheme may differ from the pensionable service in the old scheme.

If you have missed the time limit

  • You cannot transfer your accrued benefits into the new scheme.
  • You cannot opt-out for 12 months and on rejoining request the transfer is made – this would also not be in your financial interests (as it will affect not only pension accrual but also any life assurance and ill health retirement benefits which may become payable during the time you have opted out). 

 

NHS Pension Scheme Additional Voluntary Contribution (AVC) plan

  • If you contribute to the NHSPS AVC, your NHSPS AVC plan is not tied to your main scheme benefits.
  • This can be transferred to an existing free standing AVC or personal pension/stakeholder pension provided it has the relevant approval under the Finance Act 2004.
  • If you have been paying into the NHS pension scheme for less than two years you will be obliged to take a refund of a lump sum equal to the realisable value of the investments you have made into the NHS AVC (less tax).

 

Refund of contributions

This is only possible if you have less than two calendar years of scheme membership.

However, a refund will not be possible if you have less than two calendar years of scheme membership and have transferred a personal pension into the scheme. ​