NHS Pensions relief feedback

The Department for Health and Social Care (DHSC) has responded to consultation feedback on 'NHS Pension Scheme: proposed amendments to continue the suspension of restrictions on return to work'. This includes extensions to the scheme from 31 October 2022 and another consultation on 'flexible retirement and working'.

The Department of Health and Social Care (DHSC) Allowed rules concerning the NHS Pension Scheme to be suspended from March 2020 to allow retired and partially retired staff to return to work without having their pension benefits suspended or abated. The policy was due to end on 31 October 2022. This was introduced to cope with staff shortages due to those contracting COVID-19 and isolation rules.

As a result of consultation feedback, and in the light of post-COVID pressures on elective surgery, the DHSC confirmed that the suspension of abatement for Special Class Status (SCS) pension members will be extended for a longer period than originally planned. 

SCS is a preserved right awarded to certain professions in the 1995 section which, subject to qualifying criteria being met, allows a member to retire at 55 instead of 60 without an actuarial reduction in benefits that would normally apply when claiming benefits early.

• The DHSC will amend Part 3 of the 2022 Regulations (expiry of the modifications of restrictions on return to work) to extend the application of the easements to NHS Pension Scheme regulations. These include:
  • Suspension of the 16-hour rule in the 1995 section until 31 March 2023. 
    • This rule requires staff who retire and return from the 1995 section to work 16 hours per week (2 days) or less in the first month after retirement. Where staff work more than this limit, their Pension benefits are temporarily suspended until their working commitments are reduced.
  • An abatement of SCS members who retire and return to work between age 55 and 60 in the 1995 section until 31 March 2025.
  • An abatement of draw-down members who claim a portion of their benefits and continue working in the 2008 section and 2015 scheme until 31 March 2023.

The full definitions and calculations can be found here.

The DHSC will also launch a public consultation in autumn 2022. It will propose a new package of new retirement flexibilities:

• Including proposed amendments to the regulations to allow members of the 1995 section to partially retire but continue working and building up further pension.
• A provision for pensionable re-employment for those who have already retired and then returned to work.
• The consultation will also propose the permanent removal of the 16-hour rule from the 1995 section from 1 April 2023. 

Useful guides on this topic

Pensions: Tax rules and planning
What tax rules apply to pensions? What tax relief is available? What tax charges can arise? What planning opportunities are there?

Pensions: Tax charge for excess contributions
When does a tax charge arise for excess pension contributions? What are taxpayers' responsibilities under Self Assessment?

NHS Pensions: Scheme pays elections
What is an NHS scheme pays election? What is the deadline? What if complete information is not available by the election deadline? Can elections be amended?

External links

Consultation outcome: NHS Pension Scheme: proposed amendments to continue the suspension of restrictions on return to work: response to consultation