Pensions  

Govt to fix NHS inflation link and mandate pensions recycling

In August, the government announced new proposals in a consultation which extended an existing suspension on the application of rules around “retire and return”. 

The rules, which ordinarily require suspension and abatement of pensions for returning workers who exceed certain thresholds, were originally suspended in March 2020 in a bid to make up a potential staff shortage resulting from the Covid-19 pandemic.

The suspension was due to be lifted in October this year, but the government has now proposed an extension, meaning the rules would not be reapplied until March 2023. 

In reaction to the government's announcement, Hymans Robertson partner Chris Noon said: "Interventions like this continue to highlight the inappropriateness of the pension taxation system."

"The complications of the annual and lifetime allowances make it difficult for many individuals to save for retirement and ultimately have political consequences like we have seen with NHS staff in recent years," he noted, adding that Treasury should "dust off the review of pension taxation" that it came close to implementing in 2016.

Alex Janiaud is deputy editor at FTAdviser's sister publication Pensions Expert