Are changes to the NHS pension scheme key to retaining returning staff?

As proposed changes to the NHS pension scheme seem set to remove barriers to staff returning from retirement and boost retention across the NHS, what reforms will staff see?

The NHS continues to take action to tackle COVID-19 backlogs, and it’s hoped that proposed pension plans will support staff to remain in work for longer and boost the NHS workforce. 

The government has launched a consultation on changes to the NHS pension scheme to try to retain experienced NHS clinicians and remove barriers to staff returning from retirement, such as the 20,000 former NHS staff who returned to support the NHS in the COVID-19 pandemic. The consultation proposes the following changes to the scheme:

• New retirement flexibilities. 
• Aligning the timing of CPI inflation rates used to revalue pension benefits with the annual allowance tax calculation. 
• Scheme access for primary care networks.
• Technical updates to member contribution provisions. 

The changes are intended to help skilled and experienced staff to continue to contribute to the NHS up to and beyond retirement age, enable more clinicians to provide appointments, ease winter pressures and deliver care to patients. It will also allow for the retention of crucial knowledge and experience to ensure patients are receiving top quality care. 

The consultation will close on January 30, 2023 at 11:45pm and reforms are expected to be implemented in late Spring 2023. 

The major reforms all have the potential to improve staff retention in the NHS. These include:

Partial retirement options

This option supports older staff to work more flexibly and have access to part of their pensions whilst continuing to contribute. It allows NHS staff to partially, retire or return to the workforce if they have already retired, whilst continuing to work and build more pension benefits. It supports flexible working up to and beyond retirement age.

Removing limits on working hours

Removing the limits on hours that recently retired staff can work will give staff control over the hours they work in the first calendar month after returning, and help increase capacity. 

Allow retired staff to re-join the pension scheme 

This makes returning to work in the NHS more attractive as it ensures senior clinicians and NHS staff can continue to contribute to their pensions. 

Manage the impact of inflation on the pension tax system 

Fixing this interaction means that senior clinicians will have more headway against the £40,000 pension tax allowance and senior doctors are either less likely to receive a tax charge, or will receive a smaller tax charge, minimising the likelihood of early retirement.  

Expand access to the NHS pension scheme 

Allowing healthcare staff working in PCNs to access the NHS Pension Scheme will provide staff with benefits that will encourage them to stay in the NHS for longer. 

The reforms are said to play a part of the government’s commitment to build a stronger health service for the long term. With more than 21,000 primary care staff supporting patients since September 2019, the government says it is on track to meet its target of 26,000 additional staff by March 2024.