The NHS continues to face key challenges, including patient backlogs. Official data found that the number of patients waiting for treatment in September 2022 had hit a record 7 million, with the BMA saying the backlog would take years to clear.
The former Secretary of State for Health and Social Care, Thérèse Coffey, claims that the level of backlog seen in the NHS has been exacerbated due to the coronavirus pandemic. However, the retention of experienced NHS health workers is also a significant contributing factor to the ever-growing patient backlog
The NHS Business Services Authority has seen a dramatic increase in health workers retiring during the 2020/21 tax year, coincidentally just in time for the implementation of the McCloud Remedy.
As a reminder, the McCloud Remedy came into effect at the start of this current tax year, 2022/23, and all members are now contributing to the ‘new’ 2015 NHS Pension Section Scheme. The member will have the choice to go back into their older scheme, whether that be the 1995 or 2008 Section Scheme, or remain in the 2015 Scheme between the period of 2015 and 2022. The choice to opt back into the older scheme or not does not need to be made until the member decides to retire.
So, what is the government doing to help the retention of NHS staff?
Relaxation of NHS Pension Rules
The Government will extend amendments to the NHS Pension Scheme designed to boost health worker numbers, prolonging measures that were introduced in response to the coronavirus pandemic.
The amendments suspend a 16-hour weekly limit on working hours for members of the scheme’s 1995 section, along with barriers for some staff aged 55 to 60 who have claimed their pension benefits from returning to work without having their pension benefits suspended.
This suspension remains in place up to 31st March 2023.
However, the NHS Pension Scheme Advisory Board said that the 16-hour rule limiting 1995 members’ ability to work should be scrapped entirely on the basis that it serves little practical purpose for staff, employers or the pension scheme. In addition, the suspension of abatement for drawdown members of the 2008 section and 2015 scheme will be suspended until 31st March 2023. Meanwhile, abatement exemptions for special class status members will be extended until 31st March 2025.
These are chiefly nurses, physiotherapists, midwives and health visitors who were members of the scheme before March 1995 and who were eligible to retire at age 55 rather than 60 with no actuarial reduction in their pension.
Partial retirement option & Inflation
In a push to address widespread staff shortages, a partial retirement option is to be introduced that would give older employees the opportunity to draw down part of their pension while staying in work and building up their post.
The Government has also pledged to ‘fix’ pension scheme rules that have landed some senior clinicians and NHS staff with large tax bills because of the way the health service’s pension accounts for inflation.
To achieve this, the Government is considering amending the revaluation date in the NHS Pension Scheme to reduce the risk that NHS staff face annual allowance tax charges because of high inflation.
Pension Recycling
The Government also announced that by 2023 all NHS Trusts would be required to offer pension recycling, meaning employer pension contributions can be offered in cash instead of as an addition to pension funds, helping retain senior staff who have reached the lifetime allowance for tax-free pension saving.
It is important to note that Trusts will only accept pension recycling if a member has either breached their annual allowance and is subject to an annual allowance recovery charge or if the member has breached their Lifetime Allowance.
Key Dates:
October 2022
Pension Savings Statements mail run.
January 2023
31st
Tax return deadline for 2021/22 tax year that must include any annual allowance recovery charges that have been paid by the member, or the Scheme.
March 2023
31st
Extended deadline of 2020/21 Voluntary Scheme Pays deadline for members with an annual allowance charge.
31st
Reinstatement of the abatement rules for drawdown members of the 2008 and 2015 section scheme.
October 2023
Super Pensions Savings Statement mail run. This is where members will receive statements in relation to the McCloud Remedy for Annual Allowances purposes only.
If you have any questions on the content in this article, please contact your usual BHP Healthcare contact.
