Annual Allowance update for the NHS pension

Category: Financial News
Published: Wednesday, 5th November , 2014, 10:13 am
Written by Chris Dixon

The Annual Allowance, set by HM Revenue and Customs (HMRC), is the maximum amount of pension savings you can receive tax relief on each year. HMRC reduced the Annual Allowance from £255,000 to £50,000 from 6 April 2011, with the result that the total tax-free growth in the value of your NHS benefits and other pension arrangements you may have is capped at £50,000.

If the growth in your pension savings is more than the Annual Allowance then a tax charge may be payable on the amount over £50,000. This is the Annual Allowance charge.

The Annual Allowance charge is worked out by calculating the difference between the value of your NHS benefits at the start of the pension input period (the opening value) compared with the value of your NHS benefits at the end of the pension input period (the closing value).

To find the opening value we calculate your NHS benefits to the day before the beginning of the pension input period. Your pension is multiplied by a factor of 16, set by HMRC, and if you are a member of the 1995 section this is added to your retirement lump sum. We then revalue this amount by the Consumer Price Index (CPI) for the September prior to the relevant tax year.

To find the closing value we calculate your NHS benefits to the last day of the pension input period. Your pension is multiplied by 16 and if you are a member of the 1995 section this is added to your retirement lump sum.

If you are a 2008 section member we only have to calculate your pension, for both the opening and closing values, even if you made a choice to move to the 2008 section. The growth in your NHS benefits is: Closing value – Opening value

For further information a fact sheet is available on the NHS pension website. http://www.nhsbsa.nhs.uk/Pensions

Top 5 Things to Look for in a Good Locum Insurance Policy.

Category: Financial News
Published: Thursday, 25th September , 2014, 10:12 am
Written by Chris Dixon

Top 5 things to look for in a good Locum Insurance policy

1.) Premium.

I thought I would put the most obvious one first! Yes it is important to have a competitive premium but this should not be at the expense of the quality of cover especially as there are some policies out there we would NOT recommend as an independent advice company. The best way to find out if your premium is competitive is to get several premiums from different companies or go to an Independent Financial Advisor like ourselves.

2.) Permanency of cover.

Some policies claim to be ‘Permanent’ or claim to have ‘Continuation Options’. The main point here is there should be a clause within the agreement that states clearly that if a claim is made on the policy then that individual can still be insured at renewal. The terms and conditions for this vary from policy to policy so it is extremely important that this is the most scrutinised clause in any policy document.

3.) Financial strength of insurer.

It is important not to be confused by the broker or brand name and look at the underlying insurer of the policy. This will be detailed in your policy document. Ultimately these are the companies who are going to pay out on any claims. A key concern here would be claims history and financial strength of that company.

4.) Extra charges

As a company we do not charge an ‘admin fee’ for amendments during the policy however others do. It is important to note that a locum policy (especially a group one) will need amending quite frequently. It is false economy therefore to go with a company who is going to charge every time an amendment needs doing.

5.) Policy extras.

Most policies now have extra cover built in. Some of this is not always necessary but cover for ‘Suspension’ and ‘Jury Service’ is extremely desirable. Some policies now cover things such as paternity cover and personal injury. It is therefore good to know what ‘extra’ are included. Equally sometimes by removing unnecessary cover it can reduce the premium.

Chris Dixon Director

www.gplocuminsurance.com

Why reviewing your locum insurance IS a priority.

Category: Company News
Published: Tuesday, 2nd September , 2014, 10:11 am
Written by Chris Dixon

Having worked with practice managers for nearly 9 years in reducing insurance costs I have to admit that I am not envious of the challenges they face running or managing a modern medical practice. I am fortunate to have a good relationship with many who explain to me the different challenges they face, often to meet their budgets in an organisation where the ‘goal-posts’ are forever changing. One wonders whether this profession is becoming specialist in its own right and I wonder how long it will be before a University recognises this and creates a degree around the vocation?

However the downside of paddling furiously in any organisation is often things that ‘roll over’ for another year are often the ‘small fish’ to slip through the net and this is where as a financial professional I am concerned. More often or not a review of Surgery and Locum Insurance is seen as a low priority. Often passed to a part time member of staff or a deputy in a wish to clear desks for the most important areas. However in my opinion this results in false economy for the practice and ultimately the patients.

Historically any policy a practice has had for a number of years been with the same provider will suffer from ‘roll over’ and not be competitive. The effect of the premium increasing ever so slightly every year. The other flip side to this is if there has been a claim within those 12 months the insurance company often or not will try and recoup this money at renewal with an increased premium. What one should consider though is that any claim may have been a one off and therefore not affect the risk to a new insurer coming in. A new insurer after all is assessing the risk at the point of application. They will of course take into account past claims however as it has not effected them financially there is every chance they will be able to offer a more competitive premium than your current policy.

For larger practices we could be talking for a group scheme of around 6-10 members (depending on age) anywhere between £5000 – £10000 in premium. Recently a practice in West Yorkshire was paying £18500 per year and we managed to bring the premium down by £8500 by switching to a new provider without sacrificing cover.

The reality is the premiums of both locum and practice insurance are too high not to be reviewed every 12 months at least. There should in my opinion be a considered attempt to get the best value for money a medical practice can get on their insurance’s regardless of how busy they are (whilst not sacrificing quality of cover).

There is also surely a moral obligation for an NHS practice to get the best value of money it can get for the tax payer? It is true to say that the funding for GP Practices is an extremely complicated area with the global sum being made up of various factors. However personally I would much rather money saved on insurance premiums go into other areas of patient care whether that means employing a part time administrator or even a few toys for the waiting room.

At www.GPlocuminsurance.com we do not charge a fee for reviewing a medical practice’s policies. Neither is there any obligation to change. Like any professional financial advisor we offer you independent advice and we then leave it with you to decide what is best for your practice.

The next time your renewal is around (where the current insurer sends the paperwork out as close to the renewal date as possible) think to yourself for the sake of a 5 minute online form isn’t it worth checking your practice is getting the best value for money?

Chris Dixon BSc (Hons)

Director

www.gplocuminsurance.com

Spreading the cost of payments for locum insurance.

Category: Company News
Published: Tuesday, 26th August , 2014, 10:11 am
Written by Chris Dixon

We are now offering clients the ability to spread the costs of their insurance payments and locum insurance with Premium Credit Limited (http://www.premium-credit.co.uk).

For25 years Premium Credit Limited has helped businesses and individuals pay for their insurance by spreading the costs over regular instalments, instead of paying the whole premium upfront.

Premium Credit Limited doesn’t just help businesses and individuals spread the cost of their insurance premiums, they also provide the finance to pay annual fees such as professional fees, membership subscriptions, commercial service charges and school fees. Premium Credit Limited has 2 million customers and has achieved advances of £3.7 billion in 2013, processing 25 million Direct Debits.

We are delighted therefore to work with the No.1 Insurance Premium Finance Company in the UK and Ireland.

Chris Dixon BSc (Hons) Dip PFS

Director Approachable Finance (Medical)