pension taxation
© Chris Dorney |

Guidance outlining measures that can be taken to reduce the impact of pension taxation on the NHS has been published by NHS Employers

It helps employers to apply the Prime Minister’s ‘permission’ to implement a number of optional temporary measures locally.

It includes advice on:

  • The importance of independent financial advice and guidance;
  • Existing flexibilities to enable employees to remain in the NHS Pension Scheme;
  • Possible arrangements for employees who decide to opt out of the NHS Pension Scheme;
  • Further information and resources.

The measures outlined in this guidance can be used during the 2019/20 financial year, to support staff and service delivery, ahead of any changes to the NHS Pension Scheme or wider tax system.

All local arrangements should be reviewed from April 2020, as new approaches may become appropriate following the implementation of scheme changes.

Last month the government announced it would act to introduce pension changes to enable senior clinicians to take on additional clinical activities without incurring unexpected pension tax bills.

Danny Mortimer, chief executive of NHS Employers and NHS Confederation deputy chief executive, said:

“Our guidance is intended to help employers provide staff with the local flexibilities they need during this financial year. The optional measures outlined in our guidance may be implemented by employers to support staff and service delivery until scheme changes are introduced.

“We await the upcoming consultation on scheme flexibilities with interest and will be submitting a response to represent the views of employers. Our members continue to believe that greater scheme flexibilities are needed for all areas of our workforce.

“We would also echo the NHS Confederation’s clear call for the taper applied to pensions tax relief to be removed: this is the most effective long-term solution for those colleagues impacted by the annual allowance tax demands, and we look forward to discussing that with HM Treasury.”

Matt Hancock, Health and Social Care secretary said:

“I love our dedicated NHS staff – and the contribution made by our top doctors and nurses is paramount to the success of our health service.

“We will be consulting on comprehensive changes which aim to resolve clinicians’ pensions concerns so they can better balance their pensions while spending more time with their patients in hospitals or GP surgeries.

“But we also recognise immediate action is needed to help fix this and minimise the impact it is having on our NHS. Today we are giving trusts the tools they need to grant maximum flexibility to their staff right now, alongside tailored support so every top clinician can continue to care for their patients without worrying about the impact on their pension.”

At last, movement on pensions but more needed says NHS Confederation

The NHS Confederation hailed promises by the Prime Minister to tackle the current pension crisis in the health service which it says is already damaging patient care.

Following pressure from NHS organisations the government has agreed to consult on proposals to introduce pension changes to enable senior clinicians to take on additional clinical activities without incurring unexpected pension tax bills and to review the annual allowance taper which is causing so many problems.

Niall Dickson, chief executive of the NHS Confederation, which represents organisations across the healthcare sector, said:

“Operations are being delayed and cancelled. Doctors and other senior staff are reducing their hours and, in some cases, leaving the NHS – all because of a failure to think through the full consequences and effects of changes to taxation policy. We need a solution for the sake of patients and our staff and we need it now.

“This guidance from NHS Employers, which is part of the NHS Confederation, will be welcomed by staff, employers and patients because it will increase awareness of the different options available now to support staff during this financial year.

“However, problems for patients will intensify without government reform of the annual allowance taper and the introduction of new flexibilities into the current NHS pension scheme arrangements.

“In his response to our call for action, the Prime Minister has assured us that the Treasury will now review how the annual allowance taper operates to support the delivery of public services such as the NHS. We will have to see how this will work in practice but we regard this as a significant move and change cannot come fast enough.”


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