Baroness Kramer
Main Page: Baroness Kramer (Liberal Democrat - Life peer)Pensions Tax Relief: Employment and Retention
Baroness Kramer Excerpts(2 years ago)
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Viscount Younger of Leckie (Con)
I recognise some of what the noble Lord has mentioned. In recognition of the impact that pension tax has on senior clinicians in the NHS, and to improve staff retention, which was part of the subject of the last Question, the Government announced changes to the NHS pension scheme on 22 September. These include changing the pension rules regarding inflation, encouraging NHS trusts to offer so-called pension recycling—the noble Lord will know more about this than me—and implementing permanent retirement flexibilities to allow experienced staff to return to service or stay in service longer.
Baroness Kramer (LD)
My Lords, could the Minister go back and look at this, and take it very seriously? We are in a situation where, with £1 of additional income, an individual at a senior level can face something like £30,000 in additional tax liability—and that is just in year 1. This applies to medics who have worked on the battlefield in places like Afghanistan and in our emergency rooms. They have begged to be allowed to work unpaid so that they do not trigger the impact of the pension allowance cliff edge. This is a problem of bad legislation and a lack of flexibility within the schemes, both of which could be rectified with some decent attention.
Viscount Younger of Leckie (Con)
I note what the noble Baroness has said, but, on her point about flexibility, one of the actions that we have taken is extending partial retirement; for example, by allowing more NHS staff to take part of their pension while continuing to work and build further pension rights. We have also extended flexibilities enacted in response to the pandemic by suspending the 16-hour rule, which requires some pension scheme members to work no more than 16 hours per week if they return to NHS employment. So I reassure the noble Baroness that we have taken action, and I am sure that there is more that we can do.