Pay and pensions

NHS pension schemes: suspension of restrictions on return to work to assist with the Coronavirus pandemic

NHS staff returning to work to support the Coronavirus pandemic will be entitled to receive existing NHS Pension scheme benefits.

The Coronavirus Act 2020 makes provision for staff returning to work in the NHS to receive their NHS Pensions (NHS pension schemes: suspension of restrictions on return to work: England and Wales).

During the emergency period, you should be paid on the appropriate contract for the role you are fulfilling, providing you return to the same level of responsibility.

All staff who return to work in the NHS will be paid the substantive rate for their role. The actual amount and the frequency will be confirmed by your employer.

If you return to the NHS after retirement you will be paid on the appropriate contract for the role you will be fulfilling on returning. Remuneration for GP work will be benchmarked to similar work and prevailing salary levels.

If you have not retired, but left NHS employment, you will be paid at the top of the appropriate pay scale for the role you are filling. If you return to work in roles covered by NHS national terms and conditions of service, the actual amount and the frequency will be confirmed by your employer.

If you want to return to a more junior role, you will still be paid the substantive rate for that role and should be paid at the top of the pay scale for that role.

The government has introduced emergency legislation in response to the COVID-19 outbreak. This contains important information on pension arrangements for extra NHS staff. It provides for the suspension of the 16-hour rule which currently prevents staff who return to work after retirement from the 1995 NHS Pension Scheme from working more than 16 hours per week, in the first four weeks after retirement. It also provides for:

  • The suspension of both the abatement for special class status holders in the 1995 Scheme
  • The requirement for staff in the 2008 Section and 2015 NHS Pension Scheme to reduce their pensionable pay by 10% if they elect to ‘draw down’ a portion of their benefits and continue working.

Taken together, these measures will allow skilled and experienced staff who have recently retired from the NHS to return to work, and retired staff who have already returned to work to increase their commitments if required, without having their pension benefits suspended.

The legislation will give the Government the power to immediately bring these measures into effect, if required.

A six-month notice period will be given to staff and employers before these measures will cease to apply, at which point the relevant sections of the scheme regulations will take effect again. Staff and employers will therefore have six months’ notice to readjust their working patterns.

The Chancellor has changed the pension tax taper thresholds from April 2020:

  • This increases the annual allowance taper thresholds by £90,000 from 6 April 2020. The taxable pay threshold rises from £110,000 to £200,000 and adjusted income threshold from £150,000 to £240,000
  • Ensuring that the very highest earners pay their fair share of pension tax by reducing the minimum level to which the annual allowance can taper down from £10,000 to £4,000 (this will only affect those with a total income (including pension accrual) over £300,000).

For the tax year 2019/20 clinicians are reminded that there is already an NHS Annual Allowance Policy in place.

The NHS Pension Scheme provides death in service cover to active members who are yet to retire to support a member’s partner and dependents should they die before claiming their benefits. Membership of the NHSPS is voluntary and is available to all staff in the NHS who are yet to retire. Around 90% of staff are active scheme members.

NHS staff who have opted out of the NHS Pension Scheme will receive death in deferment benefits if they die in service, and they have the option to opt back into the scheme to qualify for active cover. The recent changes to the annual allowance taper thresholds announced at Budget mean that 98% of consultants and 96% of GPs are outside the scope of the annual allowance taper. The incentive to take on extra NHS work is now restored, and from 6 April doctors can earn at least an additional £90,000 before reaching the new taper threshold.

Staff who have recently retired from the NHS Pension Scheme will have already received a tax-free lump sum, but the Department of Health and Social Care is considering proposals to offer further support for those returning to the frontline.