NHS Pension Help for Doctors: NHS Additional Pension, AVCs and Tax
Two routes add to an NHS pension: Added Pension, which buys extra defined benefit accrual inside the scheme, and Money Purchase AVCs, a separate defined contribution pot. Both attract income tax relief, and both count towards your £60,000 annual allowance for 2026/27. For a hospital consultant or GP partner already inside the taper, buying more can cost more than it saves.
What is NHS additional pension, and how is it different from an NHS AVC?
They are two products and the market uses one word for both. Added Pension buys a fixed amount of extra annual pension inside the defined benefit scheme. A Money Purchase AVC (NHS pension scheme members often call it an MPAVC) is a separate investment pot. Search for NHS pension AVCs and most guidance answers about Added Pension instead, which is why doctors buy the wrong one.
The NHS AVC pension pot is a defined contribution fund, so its value is whatever the investments are worth. An NHS pension AVC therefore carries investment risk that Added Pension does not, and in exchange it is portable if you leave. Both are bought on top of the 2015 section, in which every active member has accrued at 1/54th of pensionable earnings since 1 April 2022.
| Question | Added Pension | Money Purchase AVC |
|---|---|---|
| What you are buying | Extra defined benefit accrual inside the scheme, quoted as a fixed amount of annual pension. | Units in a separate defined contribution fund held by the scheme's AVC provider. |
| Who carries the investment risk | The scheme. The extra pension is promised in pounds and rises with the scheme's own increases. | You. The pot is worth whatever the investments are worth when you draw it. |
| Income tax relief | Yes, at your marginal rate, because contributions come out of pensionable pay before tax. | Yes, at your marginal rate, on the same basis. |
| Does it count against the annual allowance | Yes. It raises your pension input amount, the growth measured against the £60,000 allowance for 2026/27. | Yes. Money paid in counts as pension input in the year it is paid. |
| Can you move it if you leave | No. Defined benefit accrual stays in the scheme and is drawn with the rest of your service. | Yes. The pot can be transferred independently of your main scheme benefits. |
| Is there a published cost | Cost per £250 of extra annual pension is set by NHSBSA and GAD factors and is re-priced, so confirm it in the current tables. | You choose the amount. There is no purchase price to look up. |
Added years and a bigger lump sum purchase are two further routes that are closed or restricted for most members now, and ERRBO lets a 2015 section member buy out part of the reduction for retiring before state pension age. For how a benefit is worked out in each section, see our guide to how the NHS pension is calculated and increased.
Does additional pension count towards the annual allowance?
Yes, and this is where the purchase decision is won or lost. Additional pension contributions increase your pension input amount, the capitalised growth in your entitlement over the year. That input amount is also the figure added back to threshold income to reach adjusted income. So buying more pension raises the measure that triggers the taper, at the same time as it raises the growth being measured against a smaller allowance.
For 2026/27 the standard allowance is £60,000. It reduces by £1 for every £2 of adjusted income above £260,000, but only where threshold income also exceeds £200,000, and it stops falling at £10,000. Both tests have to be met. The floor is reached at adjusted income of 260,000 plus 2 x (60,000 minus 10,000), which is £360,000.
How buying £10,000 of extra pension input can create a £4,500 excess
Take Dr A, an illustrative hospital consultant with threshold income of £215,000 in 2026/27 and an NHS pension input amount of £48,000. Adjusted income is 215,000 + 48,000 = £263,000, so the taper bites by 3,000 / 2 = £1,500 and the allowance is 60,000 - 1,500 = £58,500. Input of £48,000 sits £10,500 below it, so there is no charge.
Dr A now buys Added Pension that lifts the input amount by £10,000, to £58,000. Adjusted income becomes 215,000 + 58,000 = £273,000, the reduction becomes 13,000 / 2 = £6,500, and the allowance falls to 60,000 - 6,500 = £53,500. The excess is 58,000 - 53,500 = £4,500, taxed at the additional rate of 45%, which is a charge of £2,025. The £10,000 fitted inside the old headroom, but the headroom moved. Carry forward from the previous three years is what usually changes this answer.
One simplification is deliberate, and it matters. Threshold income is held at £215,000 on both sides so that the effect of the input amount alone is visible. Added Pension bought by deduction from pensionable pay comes out before tax, so in a real case the contributions paid reduce threshold and adjusted income at the same time as the extra accrual raises the input amount, which pulls the taper back and can remove the charge shown here entirely. That is why the purchase price of the units never answers the question on its own: the price, the resulting input amount and both income measures have to be modelled together.
Where a charge does arise, Scheme Pays can settle it from the pension itself, subject to a mandatory test that turns on the size of the charge and the size of the NHS input amount, and to an election deadline that a revised pension savings statement can move. The Scheme Pays calculator sets out both tests and both deadline limbs, the Scheme Pays deadlines article works through the dates, and minimising NHS pension tax charges covers opting out, refunds of contributions and redundancy.
When do you need specialist NHS pension advice?
You are a higher earner with threshold income above £200,000
If your threshold income exceeds £200,000 and your adjusted income exceeds £260,000, your annual allowance tapers from £60,000 towards a £10,000 floor for 2026/27. The floor is reached at adjusted income of £360,000. This catches hospital consultants and GP partners who never think of themselves as high earners.
You have significant NHS pension growth
The scheme is defined benefit, so what is measured is pension growth, the capitalised increase in your entitlement over the year, not the contributions taken from your pay. Growth above your allowance is taxed at your marginal rate, 40% or 45% for 2026/27.
You are thinking about buying additional pension or paying AVCs
Additional pension contributions and Money Purchase AVCs both raise your pension input amount, which raises adjusted income, which can tighten the taper. The tax relief and the allowance cost need modelling together before you commit to a purchase you cannot easily unwind.
You are considering reducing NHS commitments
Opting out stops 2015 section accrual at 1/54th of pensionable earnings and gives up death in service and ill health cover with it. Partial retirement from age 55, rising to 57 on and after 6 April 2028 under Finance Act 2022 s.10, is usually the better understood alternative, and the two are rarely compared properly.
You have received an annual allowance charge
A charge needs a cause before it needs a payment method. Scheme Pays settles it from the pension itself, but the mandatory route has conditions and a deadline, and the voluntary route is a different decision.
Common NHS pension mistakes
Treating NHS pension contributions as the thing being taxed
Tiered member contributions are set by your pensionable pay band, and paying less into a defined benefit scheme is not an option. An annual allowance problem is therefore solved by understanding the pension input amount rather than by adjusting the contribution line on a payslip.
Waiting for the pension savings statement
NHSBSA issues a statement when growth exceeds the standard allowance, but not routinely to everyone caught by the taper. By the time a statement arrives the year is closed. Statements also arrive late and get revised, which moves your Scheme Pays deadline.
Not using carry forward
Unused annual allowance from the previous three tax years can be carried forward, current year first, provided you were a member of a registered pension scheme in each of those years. Carry forward is assessed across every scheme you hold, not the NHS scheme alone.
Confusing threshold income with adjusted income
Threshold income is broadly total taxable income less your own member contributions. Adjusted income adds back the pension input amount. The taper needs both tests met, and mixing them up produces a forecast that is wrong in either direction.
Assuming private income builds NHS pension
Private practice and company income are not NHS pensionable at all. A doctor's ordinary personal service company cannot hold a GMS or PMS contract, and for a hospital consultant only the NHS employment is pensionable. Private income still counts towards threshold and adjusted income, so it tightens the taper while adding nothing to the pension.
Check your annual allowance before buying additional pension
An NHS additional pension calculator tells you the purchase price. It does not tell you the tax cost. Price the units in the NHS pension additional pension calculator at NHSBSA, then put the resulting increase in pension growth into the tool below to see what it does to your tapered allowance and any charge.
For how many members this actually catches, our Annual Allowance Pension Tax Index tracks annual allowance charges across UK registered schemes from HMRC and NHSBSA open data.
NHS Pension Annual Allowance Calculator
The standard UK pension annual allowance is £60,000 for 2026/27, and it tapers to as little as £10,000 once threshold income passes £200,000 and adjusted income passes £260,000. Enter your threshold income, the pension growth shown on your NHS pension savings statement, anything going into a pension outside the NHS scheme, and your tax band. Add the unused allowance from your previous three years if you have the statements to hand, and the calculator will apply carry-forward; leave it at zero and it will tell you the charge is a before carry-forward figure.
Total taxable income from every source, less your own member contributions. Threshold income for annual allowance purposes leaves employer contributions out
The pension input amount on your NHS pension savings statement. It is growth in the value of your pension over the year, not what you paid in
Gross contributions to a SIPP or personal pension, Money Purchase AVCs, or the input amount from another employer's scheme. The annual allowance covers every registered scheme together, and this figure raises adjusted income. Leave at zero only if the NHS scheme is your only pension
Total unused annual allowance carried forward from the three previous tax years, taken from your pension savings statements. Optional: leave at zero and the result will tell you the charge is a before carry-forward figure
Your result
Your figure is ready. Have a specialist medical accountant confirm it, or skip straight to the number.
It also has its own page, with the worked method and the FAQ.
What happens to your pension if you retire on ill health grounds?
NHS pension ill health retirement runs in two tiers, and the medical criteria for each are assessed by NHS Pensions rather than by an accountant. The part that belongs with an accountant is the tax and allowance consequence, which is also the part nobody explains. An ill health award crystallises benefits earlier than planned, so the year of award can carry an unusually large pension input amount, and once all your benefits are in payment there is no Scheme Pays election left to make.
NHS Pensions publishes the application process and the tier criteria for ill health retirement in full on the member hub, and a deferred member is assessed on a different basis from an active one. NHS Pensions ill health retirement decisions can also be appealed, which extends the timetable across tax years. If you are mid application, get the allowance position modelled before the award lands rather than after.
What is a deferred NHS pension, and what is an adult dependant pension?
A deferred NHS pension is what you keep if you leave NHS employment without drawing benefits. The NHS deferred pension is increased under the Pensions (Increase) Act 1971 rather than by active revaluation, so it moves at a different rate from a serving member's accrual. Nothing is forfeited by deferring, but the growth mechanism changes, and so does the ill health basis.
An adult dependant pension is the ongoing payment to a surviving spouse, civil partner or qualifying partner, and it sits alongside any lump sum death benefit. The lump sum side is tested against the Lump Sum and Death Benefit Allowance of £1,073,100 for 2026/27, the framework that replaced the lifetime allowance from 6 April 2024. Entitlement turns on service length and on whether death happens in service, in deferment or after retirement, so read the scheme's own scenario guidance before assuming a figure.
Partial retirement is the option most often missed here, because it lets you draw between 20% and 100% of accrued benefits from age 55 while continuing to work and re-accrue, provided pensionable pay or commitment falls by at least 10% for twelve months. Age 55 is the normal minimum pension age today, but Finance Act 2022 s.10 raises it to 57 on and after 6 April 2028, so anyone under 53 now should plan to 57 unless they held an unqualified right to take benefits earlier under the scheme rules on 4 November 2021. Our partial retirement guide sets out the conditions, and the McCloud remedy explainer covers the legacy choice made at retirement.
How do you sort out NHS pension contact details when your record is wrong?
Route the question by who holds the record rather than by searching for a number. NHSBSA administers member records and benefits, so NHS pension contact details for statements, awards and scheme rules start at the NHSBSA member hub. Primary Care Support England, the body that administers GP pension records and payments in England, holds the record for GP practitioners; in Wales that is the local health board, and Scotland and Northern Ireland have their own administrators. Your employer or practice manager holds officer records. NHS Pensions contact details are deliberately not republished here, because they change and a stale number on an accountant's site is worse than none at all.
The part nobody joins up is the consequence. NHS pension complaints and corrections take months, and a missing or revised pension savings statement moves your Scheme Pays deadline rather than excusing it. An NHS pension overpayment or a wrong contribution tier can also sit in the record for years before it surfaces. If your certified profit or your contribution tier looks wrong, our PCSE statement reconciliation guide sets out how to evidence a correction, and the open NHS pension research resource gives the longer explanatory treatment.
How an NHS pension planning review runs
Annual allowance review
Your income across every source, your pension input amount for the year, and any carry forward left from the previous three years are pulled together into an expected allowance for 2026/27, produced before the year closes rather than after it.
Additional pension and AVC modelling
If Added Pension or an NHS pension AVC is on the table, the tax relief gets modelled against the effect on the input amount and the taper. The purchase decision is then made with the allowance cost visible rather than discovered a year later.
Ongoing review through the year
Pensionable pay moves, private income moves, and the scheme's own figures get revised. The position is reviewed through the year rather than once at the end, and any Scheme Pays deadline that a revised statement has moved gets re-checked.
What an NHS pension review gives you
- ✓A full annual allowance calculation for 2026/27, with threshold income and adjusted income worked separately
- ✓Tapered allowance modelling for hospital consultants and GP partners with private practice income
- ✓An additional pension and AVC comparison costed against your own input amount, not a generic illustration
- ✓Carry forward analysis across the previous three tax years and every registered scheme you hold
- ✓A Scheme Pays review, mandatory and voluntary limbs distinguished, with the election deadline stated
- ✓A written report you can act on, with the arithmetic shown rather than asserted
FAQ
NHS pension questions doctors ask
Free first call, then a fixed fee in writing
Get your NHS pension position reviewed
Send your pension position and one of our medical accountants who works with doctors every day will read it. We read the input amount, the taper and any Scheme Pays election together rather than one at a time.
- Medical work onlyNHS pension, practice accounts and private practice
- Read by a medical accountantYour enquiry goes to our accountants who work with doctors
- One position, not threePractice, pension and personal return read together
No obligation. If our specialists think your position is already right, they will tell you so.