In recent years many of our NHS staff have been affected by pensions tax rules and, the Annual Allowance. Feedback that we have received suggests that this has had an impact particularly on clinical staff who want to help their patients by working additional hours.
As a result of the impact that pensions tax rules were having on our frontline services NHS England and NHS Improvement (NHSEI) introduced this Policy to help combat the problem. Therefore, NHSEI decided to take exceptional action so that:
- Clinicians who are members of the NHS Pension Scheme and who as a result of work undertaken in this tax year (2019/20) face a tax charge in respect of the growth of their NHS pension benefits above their pension savings annual allowance threshold will be able to have this charge paid by the NHS Pension Scheme by completing and returning a scheme pays election meaning that they don’t have to worry about paying the charge now out of their own pocket.
- The NHS employer will make a contractually binding commitment to pay them a corresponding amount on retirement, ensuring that they are fully compensated in retirement for the effect of the 2019/20 Scheme Pays deduction on their income from the NHS Pension Scheme in retirement.
This scheme will be implemented with no net cost to trusts or CCGs.
The Policy and benefits due under it are guaranteed by NHSEI and the Secretary of State for Health and Social Care. They will be administered by the NHS Business Services Authority (NHSBSA). It is a separate scheme from the NHS Pension Scheme.
Information about the policy
- Infographic for GPs
- Infographic for secondary care clinicians and dentists
- Quick guide for clinicians
- Quick guide for employers
- Frequently asked questions for clinicians and employers: updated 12 July 2022
- Annual allowance charge application form and guidance notes
- Pensions Annual Allowance Charge Compensation Scheme (PAACCS) member booklet
- 2019/20 pension tax: trust accounting provision for 2019/20: Letter from Matthew Style
- Pensions tax impacts on NHS general dental practice: Letter from Ed Waller and Matthew Style
- Pension tax impacts on the NHS – A solution for 2019/20: Template letter for non-NHS employer letter to in-scope employees
- Pensions tax impacts on NHS general practice – a solution for 2019/20: Letter from Ed Waller and Matthew Style
- Letter from Julian Kelly to NHS Trusts and Foundation Trusts with clinical staff impacted by annual allowance pensions tax during 2019/20
- Template NHS employer letter to in-scope employees
- Letter from Simon Stevens to professional bodies regarding pension tax arrangements in 2019/20
- Letter from Simon Stevens and Amanda Pritchard to local health leaders regarding pension tax arrangements in 2019/20