Pensions - Articles - NHS Pension reform welcome after months of refusal to listen


Commenting on the news that the Government has issued new plans to deal with the crisis in the NHS caused by pension tax relief rules, Steve Webb, Director of Policy at Royal London said:

 ‘After months of pretending that there wasn’t a problem, and months more of suggesting that a tweak to the NHS pension scheme was all that was needed, this u-turn is welcome. In particular, the suggestion of a review of the ‘tapered annual allowance’ is long overdue.

 This problem is not unique to the NHS nor even just to the public sector, and so any review must be comprehensive and cover everyone affected by this absurdly complex taper, including in the private sector. The best solution by far would be outright abolition, even if this meant a slightly lower annual allowance across the board’.

 ‘The proposed changes will also create a huge need for high quality financial advice. Doctors will now face an annual choice of contribution rates between 0% and 100% and may have to review their decision late in the financial year. Decisions to give up valuable pension rights should not be taken lightly or hurriedly and there is a risk that new options will be available before the necessary advice infrastructure is in place’.
  

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