Bank of England changes pension rules: What does this mean for NHS staff?

The Bank of England released a “coronavirus bill” today which laid out plans for supporting the government and the population in this troubling time. Some of the plans concern doctors pensions specifically, in an effort to encourage them to return to work without fear.


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Pension reform has been a cause of concern for doctors for a while now as many in the field claim they were unfairly penalised.

Fortunately, the Bank of England acknowledged this as the bill confirmed:

“It is important that restrictions on returning to work whilst in receipt of a pension do not act as a disincentive for healthcare professionals who wish to re-enter the workforce in order to assist the healthcare response to covid-19.

“The Bill will therefore suspend certain rules that apply in the NHS Pension Scheme in England and Wales so that healthcare professionals who have recently retired can return to work and those who have already returned can increase their hours without there being a negative impact on their pension entitlements.

The specific clause in question detailed: “This clause omits certain regulations that provide for pension abatement and suspension so as to enable individuals already in receipt of their NHS pension to return to work, or increase their working capacity if they have already returned, without facing either suspension or abatement of their pension.”

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The bill goes on to detail the specific regulations that will be affected by the changes. It remains to be seen how the changes will work in practice but some are calling for further pension changes.

Some experts within the field are theorising on how coronavirus will affect the wider auto-enrolment system.

Mark Futcher, a Partner at Barnett Waddingham, commented on the latest developments:

“Members of DC pensions will rightly have a lot of questions about the recent volatility in the investment markets and how this could impact their retirement pot and plans.

“Many members may also be worried about their immediate financial security.


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“Employees may be forced to cut pension contributions in order to meet shorter term demands – this is understandable and might be necessary.

“If they can stay in a pension then obviously they will continue to receive their employer contribution and tax relief. They could also benefit when stock markets rise.

“If, as has been suggested, the Government allow employers to temporarily cease employer contributions to a pension plan, then this will have a knock on impact for people’s pension pots.

“This would be a bold decision, but these are extraordinary times. In the face of uncertainty, many employees would rather protect their income today than their future pension income.”

The government have made recent changes to the pension system in other areas too.

In the recent budget, Rishi Sunak raised the threshold for pension tax relief, a key issue for doctors.

The threshold for high earners was previously £110,000 but this has now been raised to £200,000.

As a result of these changes, 98 percent of consultants and 96 percent of GPs are expected to benefit.

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