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All change … again!

Keeping up-to-date with pensions and regulations has never been easy, but 2015 is destined to be remembered as the year that pensions became more complicated than ever before. First there is the new NHS Pension Scheme coming into play, as well as this, many practices will face the new challenges of auto-enrolment. And these are before we've even considered the changes from the 2015 Budget announcement in March – which may yet be altered again, as a result of the General Election, when the Summer Budget is announced on the 8th July.

NHS Scheme

The new NHS Pension scheme came into force on 1st April this year, affecting all members, with most automatically moving on or after this date. Those that will notice the biggest change will be the youngest among the profession, however anyone under the age of 50 will certainly see a difference. The foremost change is the age of retirement; those on the 1995 scheme would have benefited from a retirement age of 60, while those on the 2008 scheme would be working until 65. However, the 2015 proposals will see dental professionals working until state pension age, a figure that changes according to when you were born. For instance, for those born after 6 April 1978, retirement age is 68.

This is why the younger you are, the more you will be affected – as you could essentially end up working longer. Not only that, the state pension age could (and likely will) increase and this could then be carried through into the new scheme. However, you will not be 'forced' to work until this age, although earlier retirement will incur financial penalties.

Auto Enrolment

Private practices will also have to contend with changes in how they deal with pensions this year, thanks to the nationwide Auto-Enrolment initiative that began in 2012. This was established in recognition that when it comes to putting funds aside for a healthy provision in retirement, we are a society of perennial under-savers. This was coupled with a growing concern over the stability of the state funded pension allowance as the population begins to live significantly longer.

Auto-Enrolment is therefore designed to encourage employees to save more money by having their employer automatically sign them up into a pension scheme. It requires all employers to enrol everyone they employ providing they earn at least £10,000, are aged between 22 and the state pension age and work in the UK. This benefits employees by offering a simple and easy option for joining a workplace pension; but for employers it means ensuring provision is made in line with the law and within set timelines – or facing the considerable charges for failing to do so.

It should be noted that workplace pensions schemes are not compulsory for employees; although everyone will eventually be enrolled, employees can opt out if they choose to. However, if an employee wants to do so they must act quickly, as any savings that are accumulated for longer than a month will not be released until retirement.

2015 Government Pension Reforms

Finally, there were also reforms to pensions announced in this year's Budget that could affect us all. Such as the new pension rules that make it easier, if you die before the age of 75, to pass on your pension to a dependent tax-free, although the new maximum you can save in your lifetime is reduced from £1.25m to £1m.

There were also reforms to annuity that will allow 5 million existing pensioners access to their entire pension fund. From the Government's perspective this is a very clever approach as it means they will receive the tax from those pensions now, rather than over the course of many years.

These latest changes to annuity followed on from the amendments announced last year that meant it was no longer compulsory to buy an annuity upon retirement. Although this option allows for far greater flexibility when it comes to choosing how to deal with your money, it also increases the need for specialist financial knowledge and advice to best protect and utilise these funds.

money4dentists has more than half a century of experience advising dentists and supporting them across all financial matters. The company is one of the most respected names in the industry and can provide you with expert and honest advice that will give you peace of mind that your pecuniary situation is appropriately catered for.

Pensions and the rules that govern savings and working practices are forever fluctuating and so will always be a complicated and complex area. Whether you are a business owner, practising dental professional or associate dentist, it pays to seek out the advice of trusted experts that can help you make the most of your finances and plan for a sound and secure future.

For more information please call 0845 345 5060, 0754 DENTIST. Email or visit

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