Q: My wife will be 64 years old in the autumn. She is a locum GP and started work in the UK in 2006. She is likely to earn well over £100,000 this year before deducting expenses and NHS pension contributions.
We are aware that with the new tax rules she can lose £1 for every £2 over the £100,000 income. She has not accumulated much of an NHS pension.
Is it wise for her to buy additional pension (AP in the NHS Pension Scheme) to reduce her taxable income? If she buys AP, does she have to do this before 6 April 2012, the day the 2012/13 tax year starts?
A: Without knowing a lot more about your wife's personal circumstances it is impossible to comment as to whether or not it will make sense for your wife to purchase AP.
AP does provide guaranteed benefits that can be valuable and attractive when compared with the less certain returns from investment-based schemes, such as stakeholder pensions.
AP can be purchased at any time before an NHSPS member's 65th birthday. However, the AP application process can take a few weeks to complete, so if your wife decides to go ahead, she should apply well before 5 April 2012.