The return of abatement for NHS pensions could prompt retired staff to leave the NHS, worsening staffing issues, nurses and pension experts have warned.
Retired nurses can find their pensions reduced if they earn above a certain amount upon their return to work in a process called abatement. The rule was suspended during the pandemic in order to support more nurses returning to work, but is expected to return in October.
Although the end of the abatement suspension was extended from its original date of 25 March to 31 October, its rapidly approaching return is a matter of serious concern for many in the NHS.
Paul Trevatt, who has been a nurse for 30 years and returned from retirement to support the national vaccination programme, told Nursing Practice that ‘good will’ among retired nurses may have ‘vanished’ and worries they will leave ‘en masse’ unless abatement ends for good.
He continued: ‘Workforce pressures have increased and there are still huge nursing vacancies. We simply cannot afford to lose a single nurse.’
Mr Trevatt said many nurses resigned amid uncertainty when abatement rules were initially set to return in March, after finding themselves ‘between a rock and a hard place’.
Meanwhile, wealth management company Quilter has warned that ‘thousands of the NHS’s most senior doctors and nurses are forced to choose between continuing to treat patients or suffer a penalty on their pension’ because of the expected return of abatement rules.
What is abatement?
Abatement is the ‘process whereby a member’s NHS pension is reduced pound for pound if their earnings on re-employment in the NHS, plus the unearned element of their NHS pension, exceed their pre-retirement NHS pensionable earnings’, according to the NHS.
In March 2020, the rule was temporarily scrapped – as was the 16-hour rule which limits the number of hours a nurse may work in the first month following retirement – and around 5,000 nurses took up the opportunity to return to work for the NHS.
With 42.3% of NHS staff aged between 46-65, any return to pre-pandemic rules could risk worsening an already troubling workforce shortage in the NHS, he added.
Mr Trevatt continued: ‘Questions are being asked again about what will happen now. Retired nurses who were able to stay and support are being written to by NHS pensions regarding the end of abatement at the end of October and there is disappointing sense of deja vu.
‘The issue of NHS pension abatement has raised its unwelcome head again, agitating and confusing retired (and soon to be retired nurses) in equal measure,’ he added.
‘This pillow to post reactive approach makes little operational or financial sense and treats the nursing workforce with a lack of respect and care. Abatement needs to end now while we still have some retired nurses working in the system anything less is unacceptable.’
Graham Crossley, NHS pensions specialist at wealth management company Quilter, said that ‘this is creating a perfect storm where healthcare workers are suffering penalties on their pensions or not being given adequate time to file complicated pension tax paperwork when they have other things front of mind like helping the health service get back on its feet.
‘Time is ticking before thousands of the NHS’s most senior doctors and nurses are forced to choose between continuing to treat patients or suffer a penalty on their pension. It is absurd that a raft of experienced professionals may leave the sector come autumn simply because the government haven’t extended the cessation of abatement rules.’
A spokesperson for the DHSC said: ‘The suspension of the abatement rules were a temporary measure designed to help the NHS respond to the demands of the pandemic.
‘Special class members benefit from being able to retire five years earlier than others claiming NHS pensions, so in the interests of fairness to all scheme members, it is right that abatement applies to special class members who return to work between 55 – 60.’
