Thousands leave NHS pension scheme over tax bills

Over 50,000 workers opted out of the NHS pension scheme in the 2019/20 tax year over concerns that they would be hit with a significant tax bill.

The number of people leaving the scheme rose by 22% last year, hitting a total of 50,399 individuals in 2019/20, up from 41,219 the previous year.

Over the last four years, an average of 44,843 NHS staff opted out of the scheme each year, totalling close to 180,000 staff.

The pensions annual allowance stands at £40,000 for most people in 2021/22, but taper rules mean it may be reduced for higher earners down to a minimum of £4,000.

Budget 2020 lifted the thresholds at which this taper applies, but a legacy of annual allowance issues remains for NHS medical professionals.

Nevertheless, many may later rejoin the scheme to try and reduce pension growth for the year to avoid being hit by allowance tax charges.

Talk to us about your pension.

 

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