By: 29 October 2020
Money Matters – More confusion for pensions

Dr Benjamin Holdsworth on the important pensions choice for NHS members


You will have heard that the government has launched a consultation into proposals to remove the age discrimination judged to have arisen from the implementation of the 2015 pension scheme across the public sector, including the NHS.

When the 2015 pension scheme was introduced, older members (those within ten years of retiring) were allowed to continue with their final salary schemes in the 1995 or 2008 sections. In 2018, the Court of Appeal found this to be discriminatory against younger members and the government is now seeking to offer redress across all public sector pension schemes.

Eligible pension members will be given a choice about which set of pension scheme benefits they would prefer to receive by way of compensation – their previous 1995/2008 scheme benefits or 2015 scheme benefits – for the remedy period, which is between 1 April 2015 to 31 March 2022.

The new consultation is seeking views on whether members should make this choice at the end of the remedy period or when an individual takes their benefits on retirement.

These new measures will make pension calculations even more complex in addition to the implications of unwinding up to seven years of tax calculations and payments. As yet, it is unclear how annual allowance charges will be affected for those who effectively became members of two pension schemes from 2015.

NHS pensions will almost certainly produce some generic guidance on who might be better off in each scheme, based on retirement age, as it did as part of “Choice” on introduction of the 2008 Section. This will not be a straightforward decision – we still see many clients who would have been better off remaining in the 1995 Section of the scheme, despite making decisions based on the guidance produced at the time.

This all comes alongside ongoing complexity around the lifetime allowance and tapered annual allowance and could cause further headaches for senior medics.


Dr Benjamin Holdsworth is director of Cavendish Medical – specialist financial planners for medical professionals in the NHS or private practice. For a second opinion on your finances, please contact us on 020 7636 7006.

The content of this article is for information only and must not be considered as financial advice. Cavendish Medical always recommends that you seek independent financial advice before making any financial decisions.

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