NHS Car Leases - any good?

ZG002 said:
The scheme is avaliable for me and a fair few have been getting EV's.

I'm trying to wrap my head around it pension wise.

Is there a simple way to work out the effect? Say for a 3 yr lease?

I've always had a vehicle provided by work but they are taking that away with very little notice so I'm in a tight spot for getting to work but I'm very mindful of it having an effect on pension, I'm on a decent LGPS.
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I can't comment on how good it is, but BMA made a tool (linked to within this doc: https://www.bma.org.uk/media/3834/bma-car-leasing-salary-sacrifice-examples-feb-2021.pdf).

Just check the headlines on how your pension is calculated to get a rough idea. I understand you guys get a percentage of your gross salary for every year worked (or something like that). So in effect, by SACRIFICING some of your gross salary - you are reducing the basis on how your pension is fundamentally calculated.
 
dLockers said:
I can't comment on how good it is, but BMA made a tool (linked to within this doc: https://www.bma.org.uk/media/3834/bma-car-leasing-salary-sacrifice-examples-feb-2021.pdf).

Just check the headlines on how your pension is calculated to get a rough idea. I understand you guys get a percentage of your gross salary for every year worked (or something like that). So in effect, by SACRIFICING some of your gross salary - you are reducing the basis on how your pension is fundamentally calculated.
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Yeah it's like 1/49th and then cost of living % is added / removed ontop of that figure if it's changed. Or something along those lines. Just struggling to finance a second car last minute and the nothing upfront and other benefits look decent but then I'm extra loth to go that route as my employer will make extra savings on top if I go that route (the cynic in me does wonder why they are really making the last minute change that effects 20 staff most of who are being directed towards this scheme...) it may well work out better if I just take the hit on a loan and buy a second car but I'd of rather not at this point.
 
ZG002 said:
Yeah it's like 1/49th and then cost of living % is added / removed ontop of that figure if it's changed. Or something along those lines. Just struggling to finance a second car last minute and the nothing upfront and other benefits look decent but then I'm extra loth to go that route as my employer will make extra savings on top if I go that route (the cynic in me does wonder why they are really making the last minute change that effects 20 staff most of who are being directed towards this scheme...) it may well work out better if I just take the hit on a loan and buy a second car but I'd of rather not at this point.
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As my boss always says "don't forget today dLockers". If you can't afford to eat now, it makes sense. If you are just trying to do man maths to get a shiny car - bad idea. If you are touching anything other than a full EV, then question your entire life as the numbers are just damn right dumb.
 
dLockers said:
As my boss always says "don't forget today dLockers". If you can't afford to eat now, it makes sense. If you are just trying to do man maths to get a shiny car - bad idea. If you are touching anything other than a full EV, then question your entire life as the numbers are just damn right dumb.
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Yeah, I already have my shiny car, It's only the full EV cars we have access too on the scheme but they are all 36 months.

Not even remotely interested in having a second car but the logistics just aren't working with distance to work places and school etc.

Will see if I can work out the real cost and see if it's something I can stomach in the temp or if the wife is getting a bike with a child buggy attached lol
 
ZG002 said:
eah it's like 1/49th and then cost of living % is added / removed ontop of that figure if it's changed. Or something along those lines. Just struggling to finance a second car last minute and the nothing upfront and other benefits look decent but then I'm extra loth to go that route as my employer will make extra savings on top if I go that route (the cynic in me does wonder why they are really making the last minute change that effects 20 staff most of who are being directed towards this scheme...) it may well work out better if I just take the hit on a loan and buy a second car but I'd of rather not at this point.
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as you say then if car cost gross was £8K say then you loose £160*3 years = £500p/a through duration of drawing pension .. or what cost of living grows that too;
if the original salary was £50K then pension would have been 50/49*30years = 30.6K. .. in all you loose £15K if you retired for 30years, for this one car.
 
I'm currently in the NHS Fleet scheme. It's not without problems (annual allowance/pension issues) but its very cheap and I'm just using all the money saved to pay into my ISA allowance to offset some of the damage.
 
The BMA tool (and Dlockers) are basing their numbers on the concpet every NHS worker is on the 1995 final salary pension and a consultant. This was replaced a very long time ago by the average pension, so the costs to the majority of current NHS workers will be a lot less. Also you need to factor in that nobody typically retires at 60 and will be working until 65 -67 (or more). The other factor is that average life expectancy is not 88 years in the UK, but 82 years.

I am not on the 1995 pension but the 2015 average pension and have been paying into this pension for 20 years. I will retire at 67 and my life expectancy is 82 (as of 2023), so In all probability I might at best get 17 years of pension and lose about £980 per year, or about £81 per month IF I lease through NHS lease until I retire. If I lease for 5 years it will impact my final annual pension by about £250 per year.

So you will on average be drawing a pension for nowhere near 28 - 30 years, but more like 15 - 17. You may get lucky and live longer, or you may get hit by a bus tomorrow.

The simple facts are that the tax benefits and costs of buying an EV (not an ICE) through NHS salary sacrifice CAN actually save you money. In the example I showed earlier a band 5 can lease an MG4 with 10k miles PA for ~£260 per month and get all insurance, servicing, maintenance, tax, tyres and a home charger included for that price for no upfront fees. They also put most of the risk of depreciation on the lease company. Go find a comparable lease and you will be paying around £200 - £220 extra per month. If you buy a new MG4 for £27k, or used for £22k but that will depreciate by a few thousand pound per year and you have your own costs for insurance, servicing, maintenance etc.

How much does your "own" car depreciate every month/year by the time you trade it in?
How much does insurance and servicing and maintenance cost?

My advice is to do proper research and look at the options objectively because the NHS Fleet lease scheme may be beneficial, even if you are a lower band. It most certianly isn't for everyone and there are some big pitfalls (pension) that need to be factored in. Just don't lose sight of the fact it can and will bring savings as well.
 
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Partner is a Band 6 but she is only part time, she tops up salary with some very generously paid overtime shifts at other hospital so i'm not sure how is best to work out the impact on her pension.
 
I would avoid the NHS fleet if you are restricted to ICE only. The BIK is what makes the EV options potentially viable even with the pension hit.
 
My Mrs is a pharmacist in a Dr's surgery in band 7 (just for reference). I did loom at the lease scheme but I gave up as it seems quite confusing to work out, however she's only been in the scheme for about 2 years (worked somewhere else before, now 37), but I can't believe she'll work till 65 (full time anyway), I've told her I'm aiming for 55 which is 19 years or so (unless that raises again), but I know they changed how much they pay in which seemed to benefit the consultants mire than anyone else (iirc 100k+ salary pay in less, but everyone below that pays in more). I did wonder if your wage was slightly over a threshold you would end up 'saving' by dropping into the next lower pension band I'd you did salary sacrifice for the car.
 
Lower Bands aren’t paying more in, they pay less tax so the percentage of tax savings are lower, so the net monthly payments are higher.

Like I said before the salary sacrifice scheme is only viable in limited circumstances. In my case it saves me ~£300 per month now due to avoiding depreciation, tax, servicing, insurance and maintenance etc. But it will impact my pension. The longer I stay on the scheme the more it impacts financially but I have no intention of using it until I retire.

It’s not all doom and gloom like some of the other posters seem to be implying. Neither is it a totally risk free way to save money on a lease car. The truth as always is somewhere in between and you should research before committing, or dismissing outright.
 
ICDP said:
Lower Bands aren’t paying more in, they pay less tax so the percentage of tax savings are lower, so the net monthly payments are higher.

Like I said before the salary sacrifice scheme is only viable in limited circumstances. In my case it saves me ~£300 per month now due to avoiding depreciation, tax, servicing, insurance and maintenance etc. But it will impact my pension. The longer I stay on the scheme the more it impacts financially but I have no intention of using it until I retire.

It’s not all doom and gloom like some of the other posters seem to be implying. Neither is it a totally risk free way to save money on a lease car. The truth as always is somewhere in between and you should research before committing, or dismissing outright.
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The recent change increased how much they put in. I'm sure my wife's pay went down.

Just looking at the bands, my Mrs went from something like 40 upto 48k which just tipped her into band 5 on the pension. If she did a lease she'd then drop back down to band 4 and pay less in, but the cost she would see would be smaller, but I've never worked out the difference. I might go full nerd and excel spreadsheet it :cry: .

I wonder if a compromise might be lease for 3 years then buy the car and run it for a few years to lessen the impact on the pension.
 
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Must be one of those weird cases.

When leasing through NHS lease there is an option to state you are not paying a pension. Ticking this might bump the lease up by £100 - £150 or so. I just got a quote for an iX1 at 10k miles PA for £520 per month with no pension sacrifice. This compared to £390 had I ticked the pension option.
 
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Going to be blunt, it used to be good however now it's not worth it unless you're a high tax payer or about to retire.

Also it's just full of EV's if that's your thing then fine. But I remember when they had Golf GTI's and Porsche 911 on there :(
 
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ICDP said:
Must be one of those weird cases.

When leasing through NHS lease there is an option to state you are not paying a pension. Ticking this might bump the lease up by £100 - £150 or so. I just got a quote for an iX1 at 10k miles PA for £520 per month with no pension sacrifice. This compared to £390 had I ticked the pension option.
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Seats are rubbish mind in the iX1 in the trim on nhs lease. Comes with manual sports seats that aren't very comfortable and have zero lumbar support (never mind adjustable lumbar) crazy on a car coming in at £50k+
 
It was to show the difference in monthly payments between sacrificing pension, or leaving the pension untouched.

Seats are subjective, for example I hate any lumbar and prefer manual seats. Even when using a car where we regularly switch drivers.
When switching drivers it is much quicker to adjust the manual seats in our C40, than the memory function seats in our I-Pace. Pull a lever, adjust seat position, done.
 
When switching drivers it is much quicker to adjust the manual seats in our C40, than the memory function seats in our I-Pace.
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Surely it adjusts as soon as you unlock the car and has finished by the time you get as far as getting in the car?
 
[TW]Fox said:
Surely it adjusts as soon as you unlock the car and has finished by the time you get as far as getting in the car?
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You’d think but no. The separate profiles on each key is a faff and randomly resets. We also prefer to use the same key for simplicity. Sometimes “memory” seats forget, especially if an OTA resets them etc. So by the time you have pressed the corresponding number on the door for your seat position to very slowly whir and whine and creak into place, you would have adjusted the manual seat position and be driving.

When my wife ordered her C40 I worried the lack of electric adjust and memory functions would be a big loss. Instead it was a revelation in simplicity.
 
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