NHS Pension and Tax efficiency

Tax efficiency. I love this one. So, pension offers one of the most tax efficient methods for saving towards retirement. And the NHS pension scheme is a prime example of this. When you contribute to the NHS pension scheme, you receive tax relief at your highest marginal rate, which means you can save more for your retirement, while reducing your overall tax bill. The current taxi, the allowance, stands at £60,000, providing you enough room for contributions. So most GP partners can make contributions, both as employers and as employees. This is very tax efficient and is one of the best ways to be tax efficient. If you are not a GP partner, contributing to your pension is still a very tax efficient strategy. For instance, if you're a higher rate taxpayer, every hundred pounds you contribute towards your pension, the government contributes another £40, basically. So if you are taxed at 40%, you're getting tax relief at that 40% levels.