Public Sector Pensions: McCloud Remedy

Jim Shannon Excerpts

Thursday 19th June 2025 Commons Chamber

[Christine Jardine]

I thank the hon. Member for raising a very good point, which I will come to later. I agree completely; this has been particularly difficult for many people in the light of the crises we have faced in recent years, with the soaring cost of living and sky-high energy bills.

This is what has happened to my constituents in Edinburgh West who have come to me with their issues with the administration of the remedy—not the remedy, but the administration of it—and the possible future impact on other pension schemes. One of my constituents who was affected is a retired police officer who served 25 years. His pension scheme was forcibly changed in 2017 to the CARE—career average revalued earnings—scheme, which was found to be discriminatory. He retired in February 2023 with his 25% lump sum, on the assumption that the remedial scheme would be in place by October that year. He estimates that he is now owed more than £30,000 in terms of both his commuted lump sum from the new scheme and the lower monthly pension. He is also one of thousands of immediate detriment officers still waiting for their remediation letter from the pension authorities, despite claims that the number of retired officers receiving these has accelerated, including in Scotland.

Another constituent started working for Lothian and Borders police, as it was, in 1996 and retired in 2022, knowing he would only receive his pension for his service between 1996 and 2015, while the remedy was calculated. He was told at the time that he would receive his remediable service statement by April 2025, three years after his retirement. He also estimates a loss in pension income of more than £30,000, given that seven years of his service to our community was not counted when he first retired.

A third constituent of mine has raised a possible issue that he faces when retiring with an NHS pension. The Government’s approach to NHS pension remedies means that pension growth will be calculated under an older scheme from 2008, even if he believes this rollback leaves those in the middle of their careers vulnerable to artificial breaches of the annual pension allowance and significant income tax charges because of the set-up of the 2008 scheme used for calculation.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member on securing the debate. I spoke to her beforehand to ascertain her focus, which is clearly on the McCloud remedy. The McCloud remedy will have implications on tax for some members, with some needing to pay more tax—she has outlined three—and others being entitled to a refund. My constituents in Strangford are experiencing the same issue as those in Edinburgh West and are in a similar position of uncertainty. Does she agree that discussion with financial advisers is essential, and for those who do not have access to financial advisers, the employer—the national health service, in the case of my constituents—must provide workshops to ensure that workers can understand what their choice will mean in reality?

[Christine Jardine]

The hon. Gentleman raises a very good point. This issue has affected all our constituents, in a different way. His is exactly the sort of point that I hope the Minister may be able to address.

All the cases that we have mentioned show the impact that the remedy process has had on people who have dedicated their lives to serving our communities. It is unfair and must be tackled. In written answers to myself and other hon. Members, Ministers have said that it is up to individual pension schemes and their managers to implement the remedy rather than the relevant Government Department, but that seems to allow the schemes to delay, or leaves them without the resources and support that they need to process claims at pace. Will the Minister outline how the Government work with these authorities to ensure rapid delivery of remedial pay?

What steps will the Government take to ensure that pension authorities can also deliver RSS notices to speed up the process of calculating and awarding remedial pay? That is particularly important for police pensions, as there appears to be a severe backlog in issuing those notices to retired officers to allow them to make their choice under the law. That is leaving my constituents in Edinburgh West and others facing years of further uncertainty on their finances, as the hon. Member for Strangford (Jim Shannon) referenced, and losing out on money that they are entitled to for their work.

As policing is devolved in both Scotland and, as the hon. Gentleman knows, in Northern Ireland, how are the Government working with the devolved Administrations on these pension schemes to share best practice across Departments, provide increased resource and finally give these public servants, who have served our communities, taught our children and kept us safe for so long, the safety, security and financial stability that they deserve for their retirement? Surely that is what they are entitled to.