The Department of Health and Social Care (DHSC) is consulting on new proposals to change the NHS Pension Scheme to address the impact of pension taxation on NHS staff, organisations and service delivery.
The new proposals are designed to make the scheme more flexible, to enable members of the scheme to control the value of their pension growth.
DHSC is seeking views on:
- introducing a new flexible accrual option, which would allow senior clinicians to choose to build up a lower level of pension benefits and pay correspondingly lower employee contributions (the options available would range from almost zero to 100 per cent, in 10 per cent increments)
- allowing scheme members to phase their pensionable pay increases over a set period to avoid spikes in pay which can create annual allowance issues
- who pension scheme flexibilities should be available to
- improving scheme pays
- support and guidance for individuals
- the equality impact assessment of the proposals.
Annual and lifetime allowances place a limit on the value of tax-free pension savings. If an individual exceeds those benefits, a tax charge may be due on the excess benefits. A growing number of NHS employees are turning down additional work, requesting to reduce their working hours and retiring early due to concerns about pension tax. This is having an impact on workforce supply, staff retention and service delivery.
Please share your comments and views with us to help inform our response to the consultation before Friday 4 October 2019 by emailing firstname.lastname@example.org.
The deadline for submitting your consultation response to DHSC is Friday 1 November 2019.
You can read full details of all the proposed changes on the gov.uk website and also on our pension consultation web page.
In addition, we have developed a series of resources to help employers raise awareness and improve understanding of pension tax issues.