NHS staff turn to scheme pays as taper issues rumble on

NHS Pensions offers both mandatory and voluntary scheme pays facilities. Mandatory scheme pays is only available if the growth in the members’ pension benefits is more than the standard annual allowance.

The taper issue

The tapered annual allowance gradually reduces the allowance for those on high incomes, meaning they are more likely to suffer an annual tax charge on contributions and a lifetime allowance tax charge on their benefits.

The rules have forced senior clinicians and other high earning public sector workers to either leave their pension scheme, cut down on their working hours or retire early to avoid punitive tax bills.

Doctors who are taking on extra shifts due to the current pandemic are at risk of being hit with large tax bills because of continuing issues with this charge.

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