Proposals change NHS Pension Scheme contributions for all doctors
By Edie Bourne
Independent practitioners who are part of the NHS Pension Scheme have been shocked to discover yet another Government consultation has been launched to alter the contributions they pay.
The changes have been proposed as part of the move for all members who will begin to build up benefits in the 2015 scheme from April 2022. This is a career average revalued earnings (CARE) pension scheme unlike the former final-salary schemes of 1995 and 2008.
If the proposals go ahead, doctors’ contribution rates would be based on pensionable pay rather than their notional whole-time equivalent pay. Part-time members would therefore pay reduced pension contribution sums in the future.
The structure of pension saving would also be amended, as the number of different levels of contributions would decrease. The highest contribution tier would be lowered to 12.5% rather than the current 13.5 and 14.5%.
Patrick Convey, technical director at specialist financial planners Cavendish Medical, told Independent Practitioner Today: ‘As ever, the Government changes to doctors’ pensions keep us on our toes.
‘In this instance, the proposals detailed in the consultation could be positive in some respects, but there is so much confusion among members because of the continuous tinkering that it can be difficult to ascertain your own position.
‘The proposals are meant to ensure that the costs and benefits of the scheme are more evenly shared among members, but with so much uncertainty over the McCloud remedy, which has not yet been fully detailed, we can understand why doctors might be feeling wary.
‘We are not due to receive official McCloud regulations until October 2023. This current proposal suggests restructuring the member contribution tiers over two years from 1 April 2022 with all final changes made by the following year.’
He said further Government changes to doctors’ benefits could not come at a worse time.
‘As it is, doctors have faced an arduous two years, are concerned by substantial rates of tax on their pensions, are being moved to different pension schemes from April and have a hard winter ahead.’
The McCloud remedy sets out how and when those deemed to have suffered age discrimination by moving to the 2015 NHS pension scheme originally will be compensated.
The current pension contribution consultation closes on 7 January 2022.