I came across a good article (26/03/2020) by Moira Warner, a manager at Royal London. I have made some minor alterations, but otherwise this is a piece not written by me. I am therefore thankful to Moira and Royal London and take responsibility for its reproduction, noting that the article has the usual social media sharing functionality anyway.

As the volume of overtime undertaken by frontline NHS staff increases exponentially in response to the Coronavirus crisis, we think an update on the pension issues potentially impacting doctors is timely.


Changes to the tapered annual allowance announced at the March 2020 Budget and expected to lift all but the highest paid out of the “taper trap” are due to take effect from 6 April 2020. In view of the impact the exceptional amount of additional shift work is having on the threshold income of healthcare professionals right now, it’s worth remembering the interim measures put in place for clinicians who may face an annual allowance tax charge in relation to tax year 19/20.

  • In England & Wales, NHS employers will pay clinicians’ annual allowance charges incurred in 2019/20.  This is achieved by the employer making a contractually binding commitment to “fully compensate” the individual for the impact on their retirement income of a “scheme pays” deduction.
  • In Scotland, NHS staff have been given the option of taking the value of their employer’s pension contribution as an addition to basic pay.


We’ve not yet seen a Government response to its 2019 consultation on increased flexibilities for the NHS pension scheme, although the Chancellor has confirmed that proposals to allow senior clinicians to receive extra pay in lieu of pension contributions will not be taken forward.

It may be that the dust gets brushed off some of these previous proposals, if it turns out that the overhauled tapered annual allowance doesn’t go far enough to protect the most dedicated NHS staff working the longest hours from an annual allowance tax charge.


In a widely-anticipated move, the Government is encouraging retired health and social care professionals to return to the NHS to join the fight against Covid-19.  In order to prevent post-retirement employment having disadvantageous consequences for the pension income of such individuals, emergency amendments to NHS pension regulations have been tabled.

These form part of the Coronoavirus Bill 2019-21 which received Royal Assent on 25 March 2020.  The amendments (which the Government will have the power to implement immediately or retrospectively) apply across the United Kingdom and have 3 effects:

  • The pension income of special class status holders who return to NHS employment won’t be abated (suspended).   Special Class status holders are nurses, physiotherapists, midwives and health visitors in post on or before 6 March 1995 and Mental Health Officers (MHO) with at least 20 years’ MHO experience and in post on/before 6 March 1995.    The wider pension abatement rules remain unchanged.  In particular this means that individuals who retired “in the interest of efficiency of the service” could still have their pension suspended on return to work.
  • The pension income of 1995 Section NHS members who return won’t be suspended if they work more than 16 hours per week in the first calendar month following retirement.
  • Members who have flexibly retired using the NHS “draw down” facility will not be required to maintain a reduction in their pensionable pay of a minimum of 10%

There is no proposal to amend regulations prohibiting pensionable re-employment of 1995 section retirees.  Any clients who have retired and drawn 1995 section benefits will therefore be able to return to the NHS, but will not be able to resume pensionable employment under the NHS pension scheme. Employers will need to enrol returners who are eligible workers into an alternative pension scheme.

Please also note that these measures are temporary. The Government has stated that a six month notice period will be given to staff and employers before they are disapplied.


Recent social media chatter suggests there’s concern amongst health care professionals who have made taxation-related decisions to opt out of the NHS Pension Scheme, that their loved ones will no longer be entitled to any scheme benefits in the event of their death. So clients need reassurance that this is not the case.

Although the loved ones of individuals who’ve opted out will no longer be entitled to death in service benefits if the deferred member passes away, they remain entitled to death in deferment benefits. These include a lump sum death benefit and both eligible adult survivor’s and eligible children’s pensions.

Further details on calculation of these benefits can be found in the 1995/2008 and 2015 NHS pension guides for England and Wales – as well as the guides for Scotland and Northern Ireland.

If you wish to consider additional life assurance cover please get in touch. Given the current context, applications for minimal levels of cover, before requiring medical underwriting would likely be the most prudent approach.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email


Solomon’s Independent Financial Advisers
The Old Mill Cobham Park Road, COBHAM Surrey, KT11 3NE

Email – 
Call – 020 8542 8084


Are we a good fit for you?


Solomon’s Independent Financial Advisers
The Old Mill Cobham Park Road, COBHAM Surrey, KT11 3NE

Email –    Call – 020 8542 8084


Are we a good fit for you?