In this podcast, Neil Richardson discusses one of the most common issues facing dentists considering a move away from NHS dentistry: what happens to your pension.
As more clinicians begin to explore mixed or fully private models for greater flexibility, work-life balance and autonomy, Neil explains why understanding the financial implications before making the transition is essential.
Pension preservation
Throughout the conversation, Neil highlights that your existing NHS pension benefits remain completely secure – regardless of whether you move to mixed or fully private practice.
Anything you’ve built up in the NHS pension scheme (NHSPS) stays with you and will continue to rise with inflation until you reach retirement age. What does change, however, is your ability to keep adding to those benefits.
Without active membership, your pension stops growing through new service, which means future increases come only through inflation rather than new contributions.
For dentists retaining some NHS work, Neil explains how pension contributions continue – but only on the NHS portion of their income. This means your NHS pension will still grow, just at a slower pace.
With this in mind, many clinicians in this position choose to supplement their retirement savings with a separate pension arrangement to support the private side of their earnings.
Alternative pension options
For those going fully private, leaving the NHSPS entirely means exploring alternative pension routes. Neil delves into some of the most common options, including personal pensions, SIPPs that offer greater investment choice and pension contributions made via a limited company (often an efficient route for incorporated practices).
The key, he stresses, is aligning your pension strategy with your new working model to ensure your long-term financial goals stay on track.
Tax planning
Tax planning also plays a major role. As both your preserved NHS pension and any private pension contributions count towards HMRC limits such as the annual allowance and lump sum allowance, understanding these thresholds can help you avoid unexpected charges.
With the annual allowance now £60,000 for most people (and potentially lower for higher earners), getting clarity on how your contributions interact across schemes is essential.
Tax treatment depends on your individual circumstances and may be subject to change in future.
Lost benefits
Finally, Neil explores the benefits you lose when you leave active membership of the NHSPS, including death in service, enhanced dependants’ pensions and the possibility of ill-health retirement enhancements.
These often-overlooked protections form an important safety net and replacing them (through life insurance or income protection, for example) is a vital part of planning your move into private dentistry.
Get expert advice
With the right support, you can make the transition to private practice with confidence, ensuring you make informed decisions that protect both your present earnings and your future wellbeing.
To book a conversation with a dental specialist financial adviser from Wesleyan Financial Services, visit wesleyan.co.uk/dental or call 0808 149 9416.
Please note: charges may apply. You will not be charged until you have agreed to the services you require and the associated costs. Learn more at www.wesleyan.co.uk/charges.
This article is sponsored by Wesleyan Financial Services.
