Government to consult on changes to NHS Pension Scheme tax rules
As part of wider discussions to develop an interim “People Plan” for the National Health Service (NHS), the government heard concerns from senior clinical staff that their current pensions taxation arrangements were discouraging them from doing extra work for patients. Further, these tax issues were causing them to think hard about remaining in the NHS Pension Scheme or continuing to work in the NHS. The government is listening to these concerns and has launched a consultation on a new pension flexibility for senior clinicians. The proposal would give senior clinicians the option to halve the rate at which their NHS pension grows in exchange for halving their contributions to the scheme.
With significant reductions in both the Annual and Lifetime Allowance in recent years, concerns over the pension tax regime are not confined to the NHS and public sector pension schemes; members in private sector schemes are affected too. The proposals in and outcome of the consultation is therefore relevant to all schemes that have members who are or could be affected by limits on tax relievable pension savings
Government publishes response to report on intergenerational fairness
The Government has published its response to the House of Lords Select Committee on Intergenerational Fairness and Provision's report entitled Tackling intergenerational unfairness, published in April.
On State pensions, the Government states –
The Government is committed to the Triple Lock for the remainder of this Parliament, as outlined in the Confidence and Supply Agreement with the DUP.
We are committed to ensuring economic security for people at every stage of their life, including when they reach retirement. But we are also clear that fairness between the generations must be maintained.
The Triple Lock should not be looked at in isolation. The Government has implemented other pension reform measures which seek to ensure fairness between the generations. As well as the Triple Lock, this Government has successfully introduced the new State Pension which improves State Pension incomes for many lower earners and women; whilst putting the State Pensions system on a sustainable footing.
The Pensions Act 2014 requires the Government to regularly review the State Pension age and report to Parliament, to help to ensure the costs of increasing longevity are shared fairly between the generations, and provide greater clarity around how State Pension age will change in the future. The Government’s first review of the State Pension age, published in 2017, proposed increasing the State Pension age to 68 between 2037 and 2039. We will carry out a further review before legislating to bring forward the rise in State Pension age to 68, to enable consideration of the latest life expectancy projections and to allow us to evaluate the increase in State Pension age from 65 to 66. The Government’s timetable for this increase, set out in the review, was estimated to save £74bn by 2045/46 (in 2017/18 prices), when compared with the existing timetable. It is fair that each generation should enjoy a roughly similar proportion of life spent in state supported retirement. A policy which allows each generation to spend an increasing percentage of life over State Pension age financed by an increased level of public pension expenditure will be unsustainable in the long run and unfair to subsequent generations. Together these reforms show how we are working to protect pensioner incomes whilst tackling the challenges of both rising longevity and fiscal sustainability.
Pensions Regulator publishes 2018 public service governance and administration survey
On 24 July 2019, the Pensions Regulator published its public service governance and administration survey 2018. The report can be downloaded here
Boris Johnson has been elected leader of the Conservative Party and has formally become the new Prime Minister.
He stated his “absolute commitment” to get the UK out of the EU on 31 October and to renegotiate the Withdrawal Agreement, rejected three times by the House of Commons.
The UK will not nominate a UK Commissioner for the new European Commission taking office on 1 November.
An emergency Budget could be delivered on the week beginning 7 October.
Julian Rowe | Policy, Professionalism & Research | email: Julian.Rowe@MERCER.com