Doctors, Do You Know How Much Your NHS Pension is Worth?

Never be confused about your total rewards statement again…

You are sitting down with your friend who works in the City who asks you: "Tobi, how much is your NHS pension worth?"…

What are you answering? Read on if your response would be to change the conversation to how you can't believe the next World Cup is four years away.

That time of year is rolling around where doctors will receive their annual TRS statement, and it is perhaps one of the most important financial documents a doctor could receive for future planning. At this stage, there is a good chance you are thinking, "What on earth is TRS, and why has it never been explained to me?"

I'm getting in before someone screams BORING! I promise, just open it up; it will take 5 minutes, and it will be worth your time.

Understand Your Total Rewards Statement

Your Total Rewards Statement, or TRS for short, is an annual snapshot sent to all doctors, breaking down the numbers for the year. What we really care about in your TRS is the NHS pension section. Let's start at the bottom, so scroll down, and you will see how much you've painstakingly given away in contributions for the year, and how much your employer has also contributed for you. If that employer number isn't larger than yours, well done, something has gone wrong already, and you've fallen at the first hurdle, so get on the phone to your trust’s ESR and payroll team.

Before you start getting too excited, these numbers have absolutely nothing to do with how much you receive in retirement. We have defined benefit pensions, so our pension contributions go to fund current retirees rather than being kept aside to fall into our pockets.

Okay, scroll back up to the standard benefits section and let's see what it says. You will see a table that looks like the following:

That pension figure means that, as of the year the statement was sent to you, you have earned £X amount of NHS pension per year for life. So, if you have just started as a foundation year two doctor and worked one full year in the NHS, this number will likely sit at around £450. That means you have accrued £450 every year, matched to inflation, from retirement until death. Obviously this is small for our F2 doctor, as they've only built up a relatively short amount of service.

There are no automatic lump sums in the 2015 scheme, unlike other schemes, so let's ignore that for now. Importantly, however, you can exchange some of your pension to create a lump sum later in retirement.

If, for some unfortunate reason, you don't make it to retirement, your adult dependent pension is how much an eligible spouse or qualifying partner would receive based on what you've contributed so far.

Hypothetical Annuity Cost

Now we get to the interesting part: the hypothetical annuity cost. In the non-medic world, pensions don't arrive like ours. They are far less generous and are defined contribution schemes, so you build a pot over your life. You may then choose to buy what is known as an annuity. This is where you pay, out of the pension you've built, to receive a salary in retirement, as we do. So this figure is saying the pension you've built so far would roughly cost £X to purchase privately.

Now, people in the private sector often add the value of their pension to their net worth, and why shouldn't they? It's a real part of their wealth calculation. So doctors sometimes ask a similar question: "What's the value of my NHS pension?" The hypothetical annuity cost is one answer to this question, but to others this figure almost certainly understates the actual economic value of your pension, because our pension is inflation-linked, guaranteed by the government (who tend to be fairly reliable), and pays for life. In today's annuity market, this type of pension would be more expensive.

So a better way may be to multiply your accrued pension by life expectancy. For example, suppose you retired at 68 and lived to 90; that's 22 years. If our F2 multiplied £450 x 22, they'd get £9,900, which may be a better answer to the question of how much their NHS pension is worth. But even this underestimates the value, as our pension increases with inflation every year.

But for all intents and purposes, this is a fairly good value to use. So now you know the answer when someone asks you: "Roughly how much is your NHS pension worth?"

The Cost of Needing To Be Correct (Over a Pilonidal)…

Andy and Felipe have brought the general surgery department to a halt, and over what? Disagreeing on the management of a patient's pilonidal sinus…

The matron has had to separate them and force them apart. Andy is the longest-standing consultant in the department and has treated more pilonidal sinuses than he cares to remember. He is the On-call consultant today, fighting the heat and an ED admitting abdominal pain patients under general surgery every 15 minutes. He's called to theatre, where his registrar has just begun a traditional excision of a pilonidal sinus.

Felipe, fresh from his fellowship in the States, catches a glimpse of what's going on through the anaesthetic room and, after a shake of the head, remarks that the fact that traditional excisions are still being undertaken is a sorry state of affairs. "Can you not do a cleft lift, Andy? She's had 3 abscesses!" Soon after, voices were raised, scrub nurses fled, and they were separated before anatomy diagrams were drawn on the theatre wall.

The need to be correct is one of the most costly habits doctors can carry. We all know those people, the ones who feel compelled to show their righteousness on EVERY occasion at ANY personal cost.

Little do they know, it costs them their conversations and their relationships. Felipe didn't have to abandon his own values here. He's learned a technique with better outcomes, but decided that he must educate the rest of the department, no matter the circumstance.

It's interesting, isn't it, how some people defend every belief as though changing their mind or remaining reticent on a single occasion would erase them.

Is The Consultant Office Space an Unnecessary Argument?

If it came down to office space or admin from home, which one would you pick?

We are not short of things to rant about as doctors; some might say it keeps us young. So why not add another to the mix and see if it holds its own, or whether it's an argument for argument's sake.

Who doesn't love the idea of a private office? A space in some corner of the hospital that you can call your own. Undisturbed, good wifi connection, and a photo on your desk of your children or your Labrador named Bruno.

There are trusts across the country where consultants get exactly that, either an office to themselves, or one that they share with a colleague, that has all the amenities they could possibly need. In other trusts, consultants are crammed into small offices.

Modern consultant work has changed and involves digital tasks that can be done anywhere. For this reason, consultants often argue that they are more productive doing admin tasks at home (away from the constant interruptions), and you best believe some consultants have desk set-ups that would make your average tech YouTuber jealous.

So, it seems it very much depends on the consultant. Senior doctors in managerial roles? Okay, give them a dedicated space for their meetings and whatever else they need to do. But for your average consultant, if it's between a fancy office (that they actually have to use during admin time) and being able to work from home, I think it's obvious what they're choosing.

“Can we bring back the idea of a prescribing chair/computer/room to the NHS? We all understand how consequential bad prescribing can be, yet we are frequently interrupted whilst doing these tasks.”

“For my gym-going doctors, are you in the before-or-after-work camp? I get praise for having the motivation to go before work, but personally, I could never muster up the energy to go after work.”

“Read that of the 10 million surgical operations done every year in England, 2.1 million have problems with wound healing, and 500,000 go on to become infected. There is no doubt digital remote surgical wound monitoring is the answer, with many patients putting off getting wounds checked or not having the ability to do so themselves.”

“It’s interesting that the consultant’s office has historically been a marker of status like the private parking spaces. But we are in times now where the NHS is choosing to optimise productivity by taking office space away and allowing Consultants to do admin from home.”

What’s on your mind? Email us!

Some things to review when you’re off the ward…

Callum and Jame from ID:IOTS have created the best infectious disease resource we have come across. Here’s the link to their podcast where they discuss all things infectious disease.

It is almost beyond belief that the COVID-19 inquiry has confirmed that we flushed £10 billion pounds of taxpayer money down the drain buying unusable PPE from Medpro. Of the £200 million contract we gave Medpro, they have been ordered to repay £148 million to the government. 

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The Portfolio Tax We Are All Paying

It's a Sunday evening, and now that Jannik Sinner has taken home the Wimbledon title again and the World Cup is over, you are bored. Conscious that a trip to the pantry would be another example of boredom-related snacking to add to yesterday's destruction of the mixed nuts, you look elsewhere.

So you pull out your laptop and attempt to tackle the beast that is your e-portfolio. You do some reflections, log some case-based discussions that you'd been meaning to do for weeks. Will anyone ever read this? Who knows, but it needs to be done. The same applies to any doctor with an annual appraisal, which is all of us.

Medical admin is an interesting one, isn't it? We know that medicine has moved towards longitudinal portfolios as a way of assessing learning across the year, as opposed to snapshots in one isolated moment. It also relies on reflective practice to get us to actually think about clinical encounters and what we learned from them. But this invisible admin is a second job that none of us applied for. We have no option but to spend non-working hours on it, and if we want to do it "properly," it can take many (unpaid) hours.

Artificial intelligence can assist you. It has a remarkable ability to clear up some initial cluttered thoughts that you have written down. Reflections have to be authentic, and importantly, these initial thoughts are your own. AI structures them into something readable that remains true to what you meant.

This is how you buy back your time whilst doing the reflection that's needed of you.