New Pension Recycling Scheme available for eligible NHS staff

In October 2022, the Cabinet Secretary for Health and Social Care wrote to NHS Boards offering them local flexibilities within NHS Pension arrangements, including the option of ‘pension recycling’ to assist with maintaining service delivery.

Pension recycling is where employees have opted out of the NHS Pension Scheme for tax reasons and are paid any unused employer contributions as additional salary.

After a review by the Management Steering Group (MSG) and various stakeholders, this new scheme is now open to active or deferred (those who may already have opted out) members of the pension scheme who can evidence that they are affected or may be affected by an Annual Allowance Tax Charge in respect of their pension savings in the current financial year. For those eligible who opt out of the pension scheme if not already a deferred member, an alternative payment of 12.4% of pensionable pay will be made in respect of employers pension contributions.

You can read the full criteria for the new pension recycling scheme in the national guidance notes here. If eligible and wishing to opt into the new scheme, you must read and complete the following form in full along with all appropriate documentations.

The closing date for receipt of applications is 28 February 2023, with no late applications to be accepted.

For more information or advice regarding your pension, please contact our dedicated EQ Healthcare team today via healthcare@eqaccountants.co.uk or by calling one of our offices.