Positive that NHS pensions are finally being addressed but devil is in the detail

by | Sep 25, 2022

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Written by Graham Crossley, NHS expert at Quilter

In its Plan for Patients, it is very pleasing to see that the DHSC has finally woken to some of the problems that it faces when it comes to doctors’ pensions. However, what is disappointing is that there is very little detail and as we know the devil is in the detail.

In the paper, it states that it will change elements of the NHS pension scheme to improve workplace retention and correct pension rules regarding inflation. It’s important that there are no half measures taken here considering the magnitude of the problem. Any fix needs to not only address eyewatering tax bills from the disconnect between CPI and annual allowance but also the problems with negative growth. Similarly, while the NHS face this issue severely there are other CARE schemes which also grapple with problems it and the government should avoid playing favourites with any fix and apply it across the board.

Similarly, the plan says that it will ‘encourage’ NHS trusts to explore local solutions for senior clinicians affected by pension tax charges, such as pension recycling. This kind of wording could actually mean that we get a unsatisfactory outcome as a mandated approach. However, other reports claim that it will ‘require’ NHS Trusts to adopt pension recycling, it is important that the government makes clear exactly what will be expected as this could help senior doctors stay on who are close to the lifetime allowance.


Finally, the paper suggested it will implement permanent retirement flexibilities and extend existing temporary measures to allow the most experienced staff to return to service or stay in service longer. However, the extension should also be made permanent to help better plan for staffing over the long term rather than in two year increments.

All these suggested changes are welcome but they must be done in the right way to ensure that there are not unintended problems down the road that compound the problem. It may be that during tomorrow’s mini-budget some overarching changes to pensions are announced that ultimately will reveal what’s in store for NHS pensions as well.

For the moment, the industry can be pleased that something is being done it’s just important that we know sooner rather than later exactly what that is.


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