Changes to the transitional arrangements to the 2015 NHS Pension Scheme

Changes to the transitional arrangements to the 2015 NHS Pension Scheme

Monday, 15 February 2021

Following the introduction of the 2015 NHS Pension Scheme and the transitional arrangements that were brought in, legal cases have been brought against the Government for age discrimination.

A consultation was put forth to remove the age discrimination by allowing eligible members a choice about whether they would like their benefits to continue to accrue in either the 1995/2008 scheme or 2015 scheme for the remedy period between 1 April 2015 and 31 March 2022.

Not all members of the NHS Pension Scheme are eligible to make this decision; only those who were members on 31 March 2012 can, as well as those who have been members between 1 April 2015 and 31 March 2022. The consultation sought views on whether members should make this choice soon after 31 March 2022 (immediate choice) or on retirement (deferred choice underpin).

The majority of respondents to the consultation supported the deferred choice underpin option, primarily because members will have greater certainty and understanding of their benefit entitlements at the point at which they make a decision. In comparison, concerns were raised about the immediate choice option as it would require members to base their decision around assumptions which could span decades, such as their future earnings, career paths, health, family circumstances and expected retirement date.

Given the above views, the Government intends to proceed with the deferred choice underpin option. In the meantime, all NHS Pension Scheme members will be treated as accruing benefits in the 1995/2008 scheme during the remedy period.

The deadline given for the NHS Pension Scheme to enact the move back into the legacy schemes for all eligible members is 1 October 2023.

What does this mean for you?

Pension contributions paid

Members of the 2015 NHS Pension Scheme may have had to pay contributions at an increased tier rate. Any recalculation to this rate could affect tax relief obtained, resulting in more or less tax due.

Where an individual owes more contributions, they will be owed tax relief when those contributions are paid. If an individual receives less tax relief than they would have had, had the discrimination not occurred, they will be able to apply for compensation for the difference.

If an individual has overpaid contributions and is owed a refund, individuals will receive a payment equivalent to the contributions they were owed with an amount deducted for income tax.

Annual allowance

Pension benefits are calculated differently dependent on which scheme you are in, and so any recalculation to pension benefits will affect annual allowance calculations. If there is a reduction in the annual allowance charge owed and an individual paid the tax charge personally, a refund will be issued. If they originally used Scheme Pays to meet the tax charge, then the associated pension debt will be amended, and the scheme will receive the refund.

In cases where an additional annual allowance charge is owed, the individual will have the opportunity to utilise Scheme Pays if they do not want to pay the tax charge personally.

Statutory time limits for amending tax returns for the annual allowance charge apply, however, no further guidance has been issued in regard to this where the annual allowance charge is higher in the legacy scheme.

On retirement, if a member then faces an increased annual allowance charge as a result of choosing the reformed 2015 scheme benefits, the Government will make sure they do not bear the cost of any additional annual allowance charge that is directly caused by the member exercising that choice.

Future pension provision

The Government remains of the view that all members who continue in service from 1 April 2022 onwards will do so as members of the reformed 2015 NHS Pension Scheme.

The full government response to the consultation and a useful government leaflet can be found here:

Government response

Government leaflet

For more information on the consultation see our recent blog

Need help?

For more information about this or any other NHS Pension Scheme or tax issue, please get in touch with your usual MHA Larking Gowen contact. You can find contact details on the Our People section of our website. Alternatively, call 0330 024 0888 or email

Jamie Butcher




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