Check NHS pension growth before your company contributes

Your private practice company has £200,000 in the bank. You are considering a £40,000 employer contribution to your personal pension. The company can afford it, and there may be Corporation Tax relief.

Before making the payment, there is another calculation: how much annual allowance has your NHS pension already used?

The company’s ability to pay, its tax deduction and your personal pension tax position are separate questions. Bringing them together before the payment helps establish whether the proposed amount fits.

This guide concerns the NHS Pension Scheme in England and Wales. Scotland and Northern Ireland have separate schemes and records. The company balance and proposed payment are illustrative, not a recommendation.

Your payslip does not show the full pension input

The annual allowance covers pension saving across relevant schemes. For 2026/27, the standard allowance is £60,000, although your own allowance may be lower. A payment from the practice company into a personal pension counts alongside other pension saving.

For the NHS defined benefit scheme, the relevant figure is calculated growth in benefits, called the pension input amount. It is not simply your payroll deductions, or the employer contributions shown elsewhere in the accounts.

NHSBSA calculates benefit growth by comparing closing and inflation-adjusted opening values. The calculation values annual pension benefits at 16 times the pension and adds the relevant separate lump sum. Legacy benefits and 2015 Scheme benefits may both need assessing.

That is why a personal pension contribution cannot be assessed in isolation from the NHS position.

Include the proposed payment in the calculation

Suppose the consultant’s projected NHS pension input is £35,000 and other gross pension contributions total £5,000. The proposed company payment adds £40,000.

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With an untapered £60,000 allowance, £20,000 would need support from eligible carry forward to avoid an annual allowance charge. These are tax calculation values, not annual retirement income.

The answer changes if NHS growth is higher, another contribution is made or the allowance is tapered. The company payment needs to be included when assessing the income tests too.

Higher income can change the allowance being tested

For 2026/27, the taper applies if threshold income exceeds £200,000 and adjusted income exceeds £260,000. The allowance falls by £1 for every £2 of adjusted income above £260,000, down to £10,000.

These are defined income calculations, not simply salary limits. NHS pay, dividends and other taxable income matter. Employer contributions and NHS pension growth can affect adjusted income, so a proposed payment may also change the allowance available.

Ask the accountant and planner to use the same whole-year forecast, including planned dividends, expected pay awards and changes in NHS commitments.

Establish what unused allowance remains

Subject to the rules, unused allowance from the previous three tax years can be carried forward. For 2026/27, review 2023/24, 2024/25 and 2025/26, checking qualifying scheme membership and all pension inputs.

Use the allowance that actually applied in each year, including any taper. Allowance already consumed by later pension saving is no longer available. HMRC’s calculation guidance explains why earlier use must be reconstructed, rather than taking three old statements at face value.

The current year’s allowance is used first, then the oldest eligible unused amount. Any unused 2023/24 allowance falls outside the three-year window after 5 April 2027. Check it while there is time, without letting an expiring allowance justify an otherwise unsuitable payment.

If the money purchase annual allowance has been triggered by earlier flexible access, a separate calculation is needed. Carry forward cannot increase that defined contribution limit.

Make the estimate useful without treating it as final

A mid-year review leaves time to obtain missing information. Gather pension savings statements, benefit and service records, payslips, expected pay changes and contribution records for other schemes. Include McCloud-related revisions where relevant and records of carry forward already used.

The aim is a projection with visible assumptions. A payslip alone cannot establish final pension input, and receiving no NHS pension savings statement does not prove there is no exposure when tapering or other pensions are involved.

Show what changes if earnings or benefit growth exceed the estimate. Agree a suitable margin for uncertainty and when to refresh the figures.

The accountant should separately confirm operating reserves, deductibility and payment timing. Employer contribution deductions normally follow the accounting period in which payment is made, subject to the rules. That period may differ from your personal tax year.

Before the company pays, bring the projected NHS input, other pension saving, applicable allowance and verified carry forward onto one page. Record who will reconcile the estimate with the final figures. The result should support a considered payment, rather than a guess based on the company bank balance.

This article provides general information, not individual pension or tax advice. The example is hypothetical and assumes no money purchase annual allowance restriction. Rules stated are for 2026/27 and were checked on 26 October 2026.