Background
Following the McCloud remedy, NHS Pensions have begun to issue Remedial Pension Savings Statements (RPSS) to scheme members, and we are now seeing the first of these statements coming through for our clients
Prior to the McCloud judgement, pensionable income from 2015/16 to 2021/22 for most scheme members moved into the 2015 section of the NHS Pension Scheme. Following the judgement, this has been moved back to the previous 1995/2008 section. On retirement, members may choose to take benefits for these years from either the 1995/2008 or 2015 sections of the scheme.
This change will affect the calculation of annual allowance pension savings charges, which may, in turn, impact your tax position.
More detailed background information about the McCloud remedy is available in Graham Crossley’s article in the previous edition of our newsletter.
Deadline – 31 January 2025
If you received your RPSS by 31 October 2024, the deadline to report any changes to HMRC is January 31, 2025.
However, some members may still be waiting for their statements due to pension record gaps, which NHS Pensions must address before issuing the RPSS.
If your statement arrives after 31 October 2024, you will have three months from the date of the statement to report any changes to HMRC.
Once you receive your RPSS, please forward it to us to enable us to review your information and advise on any tax implications.
Scheme Pays
If an additional tax charge becomes due as a result of the McCloud remedy, you should be able to ask the pension scheme to pay the tax for you, if required. We recommend you take financial advice before deciding to take this option because the value of your pension benefits may be affected.
NHS Cost Claim-back Scheme
The NHS has introduced a Cost Claim-back Scheme to address financial losses not automatically rectified by choosing between legacy and reformed pension schemes.
Members can apply for reimbursement of direct financial or tax losses incurred because of the remedy. The range of claims available is wide, however, NHSBSA has established specific caps as follows:
- Claims for accountancy services used for HMRC Digital Service applications are capped at £1,000 (including VAT) per piece of advice.
- Claims for independent financial advisor services regarding pension decisions for the remedy period are capped at £500 (including VAT) per piece of advice.
You can apply for the claim-back scheme within 12 months of receiving your RPSS or your first Remedial Service Statement.
For more information, please contact the BHP healthcare team.
Join us for our free NHS pension & the McCloud Remedy webinar on January 23rd 2025. Read more and sign up here.
