Warning for 200,000 NHS workers to miss out on pension benefits

Hundreds of thousands of NHS workers in their 50s and 60s could miss out on collecting pension benefits because they may not be aware of a rule change to their pension scheme, pensions experts have warned.

A total of 143,632 over-60s and 65,291 over-55s who are members of the old NHS pension scheme have not yet started claiming their pension benefits, despite exceeding the so-called “normal retirement age”.

This is the age at which they can normally start claiming their pension benefits without having to deal with payment reductions due to early retirement.

Two years ago, the ‘1995 section’ of the NHS pension scheme – which included midwives, nurses, doctors and more if they started working for the health service thirty or more years ago – was closed and active members were moved to a new scheme .

But until last year, those who took their pension benefits from the old scheme were not allowed to join the new scheme when they returned to work, meaning many staff could not access it.

Following rule changes in April and October 2023 to encourage experienced staff back into the workplace, this is no longer the case and employees can move to receive their pensions whilst remaining in the workforce.

These changes apply across the UK, although they only came into force in Northern Ireland this year.

Wealth management company Quilter, which obtained the data through a Freedom of Information request, says that since this change there are likely no good reasons for many of these 200,000 people to delay accessing their benefits that were part of the old scheme. unless they will receive a significant pay increase in the near future.

The pension generally does not have retroactive effect and does not contain provisions to postpone collecting the pension, such as you receive if you postpone collecting your state pension.

Quilter said some of the 200,000 would no longer work, and there would likely be no reason for these people not to apply for their pensions.

Those who wish to continue working while receiving the pension must either take an option known as ‘partial retirement’ – where they reduce their pension earnings and continue working – or leave the workforce and re-enter the workforce – known as ‘retiring leave and return to work’ – but each requires permission from their employer.

If those who don’t withdraw their pensions started to do so, they could use their money to supplement their income, pay off their mortgage, invest and grow their savings, or spend it.

Catherine Donaghy, who currently works as a pediatric clinical trials coordinator for the NHS, said she delayed taking her pension for almost two years because she was unaware of the rule changes.

The 61-year-old, who works at NHS Greater Glasgow and Clyde, is now semi-retired, taking her 2015 pension, but regrets not doing so sooner.

“The staff is not informed of these changes, I had to tell colleagues myself. They need to have a campaign to make people aware of this,” she said.

She says her missed time meant she couldn’t care for her elderly parents because she didn’t take up the reduction in hours she now has.

‘No matter what I do, I can’t get that time back. I had the impression that the changes were only available to the clinical staff and not to me.”

Quilter is urging the Government to do everything possible to inform NHS staff of the changes to the scheme and to amend the rules which it says mean some employers are blocking workers from accessing their pensions deny.

i has previously reported that some NHS trusts are stopping their staff from taking up the part-retirement option, and the government has said it is up to staff to negotiate with trusts if they want to take up the option.

Graham Crossley, NHS pensions specialist at Quilter, previously said there was “an incentive not to receive the 1995 section benefits at the normal retirement age if you continued to work in the NHS”.

“However, this is no longer the case as the McCloud remedy has put an end to this discrimination, and since April 2023, renewed members have been allowed to rejoin the 2015 program,” he added.

The McCloud remedy gave some NHS workers the chance to tap into their pensions again, following a decision to change government pension schemes from schemes where pension income was based on final salary to a career average.

However, Mr Crossley warned that personal circumstances could influence their decision.

“It is worth noting that individual circumstances will have an impact. “There will be some 1995 section members who would benefit from not taking their 1995 section benefits at normal retirement age, especially if they are owed a significant increase in pensionable pay,” he added. .

How you can apply for your pension

Those who are eligible can claim it by contacting their employer, the NHS Business Services Authority.

Unfortunately, people who have already missed payments cannot get the money back retroactively.

A spokesperson for the Department of Health and Social Care said: “The NHS Pension Scheme wrote to its more than two million members last year to inform them of the new pension flexibilities the department has introduced. Nearly 9,000 applications for partial retirement have been submitted so far.

“Any change in employment conditions, including partial retirement, requires the employer’s consent. Employers are supported by NHS Employers and NHS England to make arranging a flexible pension as simple as possible.”

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