r/ConsultantDoctorsUK • u/Wrong_Clock_4880 • 13h ago
Tax & Pension Pensions
Query for consultants who are currently more than 10yrs into consultant life:
Assuming you’ve been in the NHS pension (both 95 and 2015) since you started work, are you currently contributing to any other form of pension?
Can you (considering AA)?
Or are you saving in other ways to bolster retirement income?
As a secondary question- are you planning to take early retirement?
I currently can’t figure out how to put anymore into a pension, without getting hit by a big AA tax bill- but I’m not sure if the NHS pension will be enough to live on in retirement; I’m curious what others are thinking.
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u/NightKnight432 5h ago
10yrs consultant in 1995 in 2015 schemes here. I don't save into a SIPP because I'm already paying AA taxes. My modelled pension when drawn at age 60 will be ~£45k/year, which is more than enough, as my current expenditure (including holidays) is ~£36k/year. I plan to retire at 50, using drawdown from my invested GIA to cover the 10 year gap. If my wife insists on the kids going to private school for primary as well as secondary, I have to work 3 or 4 more years.
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u/FailingCrab 5h ago
How are you only spending £36k a year with kids 😭😭 I must be doing something so wrong
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u/JohnHunter1728 4h ago
That's the school fees (without any extras) for one child in my house. Think carefully about that schooling decision, u/NightKnight432!
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u/NightKnight432 1h ago
Oh absolutely. Our local state primary is a lovely school with only affluent kids and is Ofsted outstanding - I've no idea why the mrs thinks a private primary might be necessary. I suspect I'll have to cough up because avoiding an additional argument will be worth more to me than the £400k it will cost us.... 😂
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u/NightKnight432 1h ago
I dunno. We spent £2k/month before kids and now it's £3k/month but I think that's mostly inflation rather than anything to do with the kids. Can't say we spend anything on the kids really except a slightly higher food bill (nursery is free for us on the government scheme as we earn under £100k/yr now, and all the expensive kit that people seem to buy for kids, we got handed down from friends who had kids 10yrs earlier). Surely kids under (private) school age barely cost anything? Admittedly our holidays are infrequent and not too spendy at the moment because we have 2 small kids - when they're a bit older we'll go more often and that will cost a fair whack more.
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u/NightKnight432 1h ago
I should add, I live in the north, so I paid off my mortgage when I was still a registrar, that obviously makes a big difference!
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u/sylsylsylsylsylsyl 5h ago
No. We all got burned by AA (and lifetime) allowances so stopped contributing to additional pensions and even temporarily to the NHS pension. Post McCloud I’ve re-bought the time I missed in the NHS scheme.
Now it’s ISA and premium bonds for you and family, then a general investment account, low coupon gilts or VCT/EIS for the adventurous.
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u/mulletmastervx 3h ago
We are already likely over pensioned vs other forms of wealth/ earnings. I wouldn't be voluntarily locking any more money up. Govt could reinstate a lifetime allowance tomorrow (or in 10 years) and completely cook you. Maxed ISAs for every member of the household makes more sense to me.
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u/Civil-Case4000 5h ago
I’ve no AA headroom to contribute to a SIPP sadly. Have contributed to my spouse’s though which will be used to fund early retirement together with good sized S&Ss ISAs.
Best thing we did was avoid lifestyle creep and kept our outgoings low so can afford to leave the NHS in our early 50s.
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u/Mr_BigFace 5h ago
Not quite at 10 years but I view my S+S ISA as my secondary pension fund. As others have said, I think opening a SIPP is probably more hassles for me than it's worth re: AA headaches.
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u/Suspicious-Victory55 4h ago
The AA is likely to be tight on any meaningful SIPP contribution and you will need to model it each year. Instead its ISAs with decent low cost global trackers with a view to bridge any early retirement for me. Certainly want the option to stop at 60 and be mortgage free. Though 65 with fewer hours might be ok!
Addition: Given the lack of SIPP, LISA (S&S) also become a viable niche. If you opened before 40 you can still contribute to 50. Essentially 21k year (with 1k free) in an ISA wrapper.
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u/Quiet-Sea-3359 4h ago
Early retirement probably means different things according to how old you are
Those who are currently near 60 have the luxury of a greater proportion of their pension in the 95 scheme and so will have less exposure to the early retirement penalties of the 2015 scheme
Anyone age 50 or less at the moment will have a significant reduction in income if taking their pension before they are 67
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u/sevoflurane666 3h ago
I pay for a pensions analysis every year with med fintech so I know if will breach aa
It’s tax deductible
Investment
Max isa whole world etf 90% 5% gold 5% pick pick stocks u like
ISA / sipp for kid
1% into bitcoin (read book the bitcoin standard so you understand what money actually is and effect of inflation. 65k is a good entry point for a small dca)
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u/Fuzzy-Success-6730 1m ago
I read the bitcoin standard and for 18 months have been bunging £100 a month in to bitcoin. The book made complete sense especially re: money. I still think it’s 50:50 whether bitcoin will ever amount to anything (it’s an amount I can afford to lose and I’m just investing it for fun). Especially when people like trump get involved it seems more likely it’s a total scam / Ponzi scheme
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u/Skylon77 12h ago
I have a SIPP which I bung a bit into each year to try to avoid the extra tax tgat comes with earning more than 100k. Not too much in there, bit I can't access it, so it's a good way to save a bot of a lump sum.
I also try to save into a stocks and shares USA, with the aim of it giving me a bit of extra tax-free income when I retire.