Can I transfer my NHS pension? Not to a SIPP or other flexible scheme with two or more years' qualifying membership, NHS Pensions' table says.

For members with two or more years' qualifying membership, NHS Pensions says transfers to schemes that provide flexible benefits, a SIPP included, are not permitted; for less than two years it lists time limits instead. The law separately restricts transfers out of unfunded public service schemes. An FCA-authorised adviser can help you see where the NHS pension fits among your savings, and the form on this page takes an enquiry at no charge.

The rule: unfunded public schemes cannot pay out into flexible pensions

The NHS Pension Scheme has no invested fund behind it; the Exchequer meets the cost of benefits, according to the 2015 Members Guide (V13, 05.2024).

Section 68 of the Pension Schemes Act 2015 inserted subsections (2A) to (2C) into section 95 of the Pension Schemes Act 1993, on using a cash equivalent. Section 68 is headed as applying to Great Britain and was fully in force from 6 April 2015, though not for applications made before then. Subsection (2C) defines an unfunded public service defined benefits scheme as one meeting some or all of its liabilities "otherwise than out of a fund accumulated for the purpose". For its members, subsection (2A) allows a move to another occupational scheme or a personal pension only where the benefits it can provide "are not flexible benefits", its trustees or managers are able and willing to accept the payment, and it meets requirements prescribed in regulations. Annuities meeting prescribed requirements are also allowed; other arrangements only in circumstances prescribed under section 95(5A). Subsection (2B) lets the Treasury disapply the flexible-benefits condition in prescribed circumstances or for prescribed schemes.

NHSBSA's Leaving Early and Transferring Out Guide sets out destinations in a table. Against "A registered personal pension scheme (including a SIPP) or stakeholder pension", and against money purchase occupational schemes, the column for two or more years' qualifying membership says "From 6 April 2015 transfers to schemes that provide ‘flexible’ benefits (including money purchase benefits) are not permitted". The less-than-two-years column lists time limits instead, such as taking out the personal pension within 12 months of leaving pensionable NHS employment. The table does not say why the columns differ; NHS Pensions can say how it applies to you.

What a permitted transfer involves

Where a transfer is allowed, NHSBSA's guides say the receiving arrangement must be "registered with HM Revenue and Customs (HMRC) and able to accept a transfer payment from the NHS Pension Scheme". For a registered defined benefit scheme, a member with two or more years can apply at any time; one with less than two years must join the new scheme within 12 months of leaving pensionable NHS employment and apply within 12 months of joining it. Either way: "In ALL cases the transfer must be completed, this means the transfer payment sent to your new pension scheme, before you reach the Normal Pension Age for the Section or Scheme you are a member of".

NHSBSA's UK Transfer Out guide lists a registered occupational scheme "that is a member of the Public Sector Transfer Club" as a destination. The Club now has an Inner and an Outer part; the NHS scheme is in the Inner Club, but the transfer value method depends on the type of NHS benefits you hold and how the receiving scheme is classified, and CARE benefits going to an Outer Club scheme may move on non-Club terms. For Club terms you must apply for payment within 12 months of joining the new Club scheme, and the gap between leaving one and joining the other "must be no more than five years"; otherwise the transfer can only be on "non-Club terms". Any excess growth in the receiving scheme's benefits, such as from a rise in pensionable pay, counts in the pension input amount for annual allowance purposes (see is the NHS pension worth it).

Two edges sit outside the main table. Someone transferring benefits out of the main scheme who also paid into the NHS MPAVC Scheme with Prudential, Standard Life or Equitable Life can "transfer your NHS MPAVC fund to any other registered pension scheme in which you are participating" or leave it invested. For overseas moves, the Unfunded Public Service Defined Benefits Schemes (Transfers) Regulations 2015 (SI 2015/1614, in force 7 September 2015) require the receiving arrangement to be an overseas arrangement, able to take any contracted-out section 9(2B) rights, a qualifying recognised overseas pension scheme where the sending scheme is registered, and one that "may only provide benefits by virtue of the subscription that are not flexible benefits". Their explanatory note says they prevent transfers to a QROPS that can provide flexible benefits as a result. See moving a UK pension to another country.

What a move would give up

The FCA and The Pensions Regulator believe it is in most people's best interests to keep a defined benefit pension, and the FCA notes that a transfer cannot be reversed. Among the risks it lists for anyone leaving such a scheme are losing the guaranteed lifetime income for you and your dependants and, once the money is invested, a pot that can fall as well as rise, so you "May have less income in retirement, particularly if the value of your pension pot falls." NHSBSA asks anyone considering a transfer to compare the benefits given up with what the new scheme offers.

If a transfer into flexible benefits does go ahead, a legal check applies: if the safeguarded benefits carry a transfer value above £30,000, the scheme has to see evidence of appropriate independent advice before paying (SI 2015/742, regulation 5, as substituted from 6 April 2018). Which route, if any, fits depends on your section, your years of membership and where the money would go. When the form on this page lands with the adviser firm, an FCA-authorised adviser can phone about your own record.

Scotland and Northern Ireland

The NHS Scotland scheme is run by the Scottish Public Pensions Agency (SPPA), whose leaving guidance says you can "transfer out to an approved workplace pension scheme with defined benefits", and that someone with less than two years' pensionable employment with NHS Scotland "can also transfer your pension benefits to a defined contribution scheme". With more than two years' service, it says, you can apply any time before normal pension age. Moves between the corresponding health service schemes of England and Wales, Scotland and Northern Ireland have special arrangements, which NHSBSA says are normally available only when you apply within one year of being eligible. Northern Ireland has its own corresponding scheme, so ask it which rules apply to you.

Offers to move or release an NHS pension

NHSBSA warns that members have been targeted: "For most people, the offers will be bogus", and those taken in may face HMRC tax charges "of more than half the transfer payment because the transfer was unauthorised". It also says some scammers steer members into small, often one- or two-member, occupational schemes to escape regulators' scrutiny.

The FCA says scams often use attractive offers to get you to move or release a pension. An unexpected free pension review is "likely to be a scam"; a cold call is "illegal and probably a scam", best met by hanging up; and "Never take advice from the company that contacted you". The Pensions Regulator lists 'pension liberation', 'loan', 'loophole' and 'cashback' among common signs. NHS Pensions can confirm whether any proposed move is possible before you sign anything. See how pension scams work, how to report one and the FCA's pension scams page.

Questions about moving an NHS pension

Is there an NHS pension transfer out form?

NHSBSA's member hub says "If you want to transfer to another UK scheme, read and complete the transfer out guide and application pack"; overseas moves use a separate pack.

Can I transfer my NHS pension while I still work for the NHS?

NHSBSA says "If you have not yet left NHS pensionable employment, a transfer is not possible", though it can give an estimated value. How values are worked out is on how an NHS pension is valued.

Can I move a pension from another job into the NHS scheme?

That is a separate question, answered in transferring a pension into the NHS scheme.

Your next step

NHS Pensions, MoneyHelper and, if you are eligible, Pension Wise all offer free help. Should a wider review of your savings help, the form on this page can be sent at no cost, after which an FCA-authorised adviser from the firm calls you. Other pensions are covered in how to transfer a pension.

Sources