News

2019-20 pensions annual allowance charge compensation policy

The NHS Pension Scheme will reimburse clinicians' annual allowance pensions tax charges received as a result of work undertaken in 2019/20 tax year.

10 December 2020

NHS England and NHS Improvement has published further details confirming that the NHS Pension Scheme will reimburse clinicians for any annual allowance pension tax charges they have received as a result of work undertaken in this tax year (2019/20).

For the NHS Pension Scheme to cover this tax charge, eligible staff will need to complete and return a ‘Scheme Pays’ form before 31 July 2021.

Employers will need to make a contractual commitment to provide full compensation to clinicians in retirement. This commitment will cover any reduction made to pension benefits as a direct result of using ‘scheme pays’ to pay their annual allowance tax charge for the 2019/20 year. This will be funded nationally and there will be no net cost to employers.

Further information

More details about the arrangement can be found on the NHS England and NHS Improvement website, including FAQs that have also recently been updated.