Thousands of nurses and doctors could be financially penalised because of an upcoming change to pensions, analysis has shown, prompting warnings that affected staff could leave the NHS.
This comes after the UK Government introduced measures to allow recently retired to return to work without suffering a penalty on their pension, as part its Covid-19 pandemic response.
But the data obtained by Quilter, a wealth manager and financial adviser, revealed 7,420 doctors and nurses on the NHS pensions scheme may be impacted when the temporary suspension to pension penalties ends on 24 March. It warned this could trigger them to leave.
Some NHS pension scheme members are allowed to retire at age 55 without any reduction to their pension. This includes nurses with a ‘special class’ status – because they were members prior to 6 March 1995 or meet other eligibility criteria from the old scheme.
But on re-employment to the NHS, their pension is reduced pound for pound if their earnings plus the remainder of their NHS pension exceed their pre-retirement NHS pensionable earnings. This is called ‘abatement.’
Calls to delay pension penalty
Graham Crossley, Quilter NHS pensions specialist, has urged the Government to ‘urgently’ extend this pension penalty relief. Although health minister Edward Argar said the issue was ‘under review’ in Parliament on 10 January, Mr Crossley said this was ‘not good enough’ with time ‘running short’.
He continued: ‘Although recent headlines about pandemic have been more positive, there are still significant pressures on the NHS and the prospect of thousands of NHS staff leaving in March to understandably avoid a financial penalty will add to an already challenging situation.
‘Many workers have already received their letters and will need to make their decisions now as to whether they will keep working after 25th March. This should be the least that is done to help hard working doctors and nurses continue to battle Covid.’
This comes amid fears about staffing shortages, with the RCN and RCM warning last week that mandatory Covid vaccinations could ‘see staffing levels fall further’ with ‘catastrophic’ results