Purpose of the Ready Reckoner

Purpose

This tool is a "ready reckoner", which means that all outputs are estimates only and should not be relied upon for accounting or other purposes. These outputs are based solely on the data you input into the Ready Reckoner.

The aim of the tool is to provide members of the NHS Pension Scheme with a broad insight into their Annual Allowance (AA) position, give an indication as to whether or not the tapered AA may apply to their circumstances, provide an estimated breakdown of the total annual cost of scheme membership, and estimate how much their NHS pension is projected to increase by. The tool estimates the position over the 2024/25 tax year only.

The NHS Employers website has information on the ‘McCloud remedy’ including how it interacts with scheme benefits and pension taxation. The Ready Reckoner does not implicitly allow for the McCloud remedy.

The tool uses contribution and tax rates for England and Wales. As a result, members in Scotland and Northern Ireland should be aware that the outputs will not accurately allow for their circumstances. You should seek financial advice if at all unsure about your tax position.

The Ready Reckoner will assign you with a traffic light rating for 2024/25 based on your inputs:

  • Green rating – You are projected to be well under the Annual Allowance
  • Amber rating – You are projected to be reasonably close to the Annual Allowance
  • Red rating – You are projected to breach the Annual Allowance

A red rating means that we estimate the growth in your projected pension benefits over 2024/25 will exceed the AA. This does not mean that you will necessarily have an AA tax charge to settle and, even if you do, it will often be the case that the scheme still provides good value for the cost of membership.

A green or amber rating does not necessarily mean that your pension growth will be under the Annual Allowance in practice as the outcome depends on your data inputs and there are several limitations as stated throughout the Ready Reckoner.

A pdf of the output from this tool can be downloaded to your device for your records and can also be used to discuss potential solutions to any AA problems you may have with your employer.

Inputs

All inputs are contained in the first “Data” tab of the reckoner.

You’ll need to have a few documents to hand to help you complete the data section. These include:

  • Your most recent Annual Benefit Statement(s) (dated 31/03/2024). If this is not yet available when you are using the tool, you should estimate your inputs at 31/03/2024 to the best of your ability. Your previous statement may be useful as a guide for any estimation you make.
    www.nhsbsa.nhs.uk/employee-section/what-type-statement-will-i-receive/about-annual-benefit-statements-abs
  • Details of your expected pay and working hours (relative to the Full-Time Equivalent for your role) for the 2024/25 Scheme year
  • Correspondence regarding any Additional Pension you may have purchased

Help

Most inputs and results have a question mark button by them to help you to understand the Ready Reckoner. Clicking on these will bring up pop-up boxes with additional explanations for what you need to input, where you can find a particular piece of information, or what an output means in more detail.

If you need additional help with using the Ready Reckoner, see NHS Employers’ webpage for guidance: www.nhsemployers.org/readyreckoner. If you are still in need of help once you have consulted the materials available, you should speak to your employer. Advice on supporting employees through the use of the Ready Reckoner has been provided to employers.

Please visit the version history page at www.nhspensionaatax.org/VersionHistory to view Ready Reckoner system updates.

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