Specialist financial adviser Paul Griffiths, for Wesleyan Financial Services, highlights why it is so important for dentists to think about replacing their sickness benefits.
I am often contacted by clients for support and guidance surrounding NHS employment benefits. Over the years it has become apparent to me during reviews and during general conversation with dentists that there is a lack of awareness regarding the NHS basket of benefits.
When thinking of either partially or fully transitioning from the NHS to private practice, I would emphasise to any dentist that it’s important to ensure that you fully understand the provisions that you will either lose or reduce as a consequence of starting to change that balance of practice.
What would happen if you could not work due to sickness?
When making the switch, I have found that many of my clients think primarily about losing their NHS pensionable benefits. However, I would encourage dentists to consider another important element of the NHS benefits package which needs to be replaced when you transition to private dentistry, and that is sick pay.
A key part of your basket, NHS sick pay helps you to survive through periods of inability to work due to sickness, an accident or illness. Whether that be short term or long term, as an NHS dental practitioner, provided you have been on the dental register for two years, you will be eligible for sick pay.
However, as a private dentist you will lose that benefit, or it will be considerably reduced. A question to ask yourself here is, how long could you cover your bills and expenses without a regular income if you were unable to work?
During my career as an adviser, I have unfortunately seen the negative impacts of clients and their families having insufficient income due to illness. This has had a significant effect on not only their lifestyle and standard of living, but also on their loved ones.
Ensuring that you are always in a well-informed position can help to minimise these risks. This is why it is always useful to regularly review your benefits, your circumstances, and the appropriateness of those benefits to your circumstances.
And if they’re not appropriate or not at the level that they need to be, then action should probably be taken or at least guidance should be sought, to see what options are available to cover any gaps.
Long-term sickness
In the unfortunate event a dentist suffers from a long-term illness, within the NHS employment basket of benefits there is an additional benefit called an ill health retirement pension. This is designed to provide financial support for someone with a serious illness. The NHS ill health retirement pension has two tiers – these are referred to as tier one and tier two.
Tier two refers to the enhanced ill health retirement pension – this is payable to NHS dentists with serious illnesses that would not only prevent them from practising dentistry but would permanently exclude them from doing any type of work at all. When moving over to private practice, it is important to consider replacing these benefits to ensure that should anything unexpected happen in the future, you would have the necessary provisions in place to ensure your financial security.
Why is it so important to have regular reviews?
We understand that dentists are busy people – after a busy day of caring for your patients, putting some time aside to understand exactly what you have got in terms of NHS benefits and how any gaps will be bridged when moving to private practice, may understandably for some, feel like yet another arduous task.
This is where it can be extremely useful to seek professional support from someone who not only understands the career progression and income patterns of a dentist, but also understands the intricacies of NHS employment and pension benefits and can help you to identify what you currently have, and what will need to be replaced as a result of a full or partial transition.
I would also add that as a general rule of good housekeeping for any dentist, whenever there is any type of change in circumstances, be it an increase or decrease to your private work balance, it is always beneficial to have a review to evaluate what you currently have, including any existing cover and to check its suitability to determine if it is still appropriate.
Tax treatment depends on individual circumstances and may be subject to change in future. Wesleyan Financial Services is a broker and insurance products are provided by a number of selected insurers.
For further support and guidance to plan for the financial year ahead, speak to a dental specialist financial adviser at Wesleyan Financial Services by booking a no-obligation financial review or calling 0800 316 3784.
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