Money Talks – to be private or not to be private?

Iain Stevenson weighs the pros and cons of switching from the NHS to private practice

Iain Stevenson weighs the pros and cons of switching from the NHS to private practice.

Without question, the past three years have been incredibly challenging for dental professionals.

Struggle after struggle

When we consider all the current personal challenges we’re facing – inflation hitting double figures and widely expected to grow, energy bills at an all-time high, interest rates continuing to rise – these combine to result in the reduced purchasing power of the pound in your pocket. 

Add to this the ongoing challenges NHS dentistry faces with budgeting and access issues, the struggle to work through post-Covid-19 waiting lists and the workforce challenges around the country given the issues in attracting and introducing overseas dentists.

It’s no wonder many dentists and practice owners are taking time to reflect on how best to position themselves to ensure patients continue to receive the best possible service while maintaining and hopefully growing their businesses.

One question we hear as financial advisers is whether it’s time to move to private practice or reduce NHS commitments. While we can’t address all the pros and cons in one short column, here are some considerations to help you decide. 

NHS benefits or private benefits?

In terms of personal financial planning, the first step is to explore replacing the NHS ‘basket of benefits’. 

The NHS pension scheme remains an outstanding asset to those who are members. Consider the cost of replacing this should you leave the NHS or dramatically reduce your NHS commitments. 

Also, don’t fall into the trap of trying to replicate the NHS pension scheme with other plans, as this is an apples and oranges scenario. 

Personal pensions are an excellent, tax-efficient method of saving for your retirement. However, they operate in a completely different way from the NHS pension scheme. Before making final, irreversible decisions, seek expert financial advice.

In addition to the pension scheme, use this time to reflect on the family protection you have in place. If you and your family rely on potential benefits from the NHS should you die or be unable to work through illness or injury, again you need to rethink your provisions. 

At least, take the opportunity to review what you have in place and whether it’s appropriate for your family’s needs.

Review your contracts

Finally, take time to review your contracts and arrangements.

Did you get around to completing the partnership agreement or is it time to review your principal/associate contract? Should you introduce a dental plan for your patients?

When considering the move from NHS to private, surround yourself with the right people who can give you the right advice and ensure you don’t miss crucial steps in the process. 

Remember, tax treatment depends on individual circumstances and may be subject to change in the future. 

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