Pensions  

NHS eyes pension changes for unmarried partners

NHS eyes pension changes for unmarried partners

The Department of Health is proposing changes to the National Health Service (NHS) Pension Scheme, which will allow unmarried or cohabiting partners to claim survivor pensions without being nominated.

This proposal, which is being discussed in a consultation launched by the government, follows a Supreme Court ruling in February.

At the time, the Northern Ireland Local Government Officers’ Superannuation Committee was told to pay a survivor's pension to the unmarried partner of a dead member, more than seven years after his death.

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The Supreme Court found “that the essence of entitlement to the benefit is that the couple have lived together for a sufficiently long period of time, and that one is financially dependent on the others or that they are finally independent”.

In response to the judgment, the HM Treasury has determined that public service pension schemes remove the nomination form requirement for new claims and pay survivor pensions in qualifying cases from the date of the member’s death, regardless of when the claim is made.

There are two NHS pension schemes: the new reformed 2015 scheme and the older, closed scheme, which is divided into the 1995 and 2008 sections.

At the end of March, the plans had around 1.5m active members, 619,655 deferred members and 869,075 pensioners.

Survivor pensions for qualifying unmarried partners were first introduced as a NHS scheme benefit in April 2008.

Since then, unmarried co-habiting partners must be nominated by their partner in order to be eligible for a survivor's pension.

The survivor also had to show that he or she had been a cohabitant for at least two years before the date on which the member had both sent the nomination and died.

There were no such requirements for married couples.

The Supreme Court ruling, however, did not call into question the remaining qualifying criteria, such as the two-year period requirement, which is still in place.

Nathan Long, senior pension analyst at Hargreaves Lansdown, argued that this change “is completely sensible and makes the scheme more relevant to modern day relationship patterns”.

He said: “People don’t like to think about retirement, but they like to thinking about death even less, so expecting members to pre-nominate a beneficiary if they are unmarried was unrealistic.

“It is a reminder that death benefits on many pension schemes are not always what you expect, so checking how your family would be protected in the event of death is a good use of time.”

The consultation will close on 29 December.

maria.espadinha@ft.com