By: 19 February 2021
Cavendish Medical – Pension consultations now concluded

Dr Benjamin Holdsworth on the benefits compensation choice

The government has now concluded on the ‘McCloud’ consultation which refers to the age discrimination court case regarding the 2015 NHS Pension Scheme.

When the 2015 pension scheme was introduced, older members (those within ten years of retiring) were allowed to continue with their defined benefit schemes in the 1995 or 2008 sections. In 2018, the Court of Appeal found this to be discriminatory against younger members in a case brought by judges (named McCloud) and firefighters. The government has agreed to redress this discrimination across all public sector pension schemes in a move expected to cost around £17billion.

Essentially, doctors impacted by this issue can choose to accept as ‘compensation’ the pension benefits from their previous 1995 / 2008 pension scheme or those from the 2015 scheme for the ‘remedy’ period which will run from 1 April 2015 to 31 March 2022. Note, this offer is only relevant to those not already in receipt of their pension.

The consultation focussed on whether the choice would need to be made immediately after the remedy period had ended or at the time of retirement. The conclusion is that doctors (and other affected public sector employees) have the right to make a ‘deferred choice’ of which remedy benefits to accept.

It is difficult to imagine that the NHS pension scheme, and the tax related to it, could get any more complicated but this issue will have a significant impact on those affected. It is possible that the last seven years of tax calculations and annual allowance figures will need to be reworked.

As ever with government regulatory changes, we are expecting more detail to emerge in the coming months and it is possible that some generic guidance will be published. However, it will not be a straight-forward decision for those with complex income streams and those confused by the options should seek expert advice.

The government has also concluded on its ‘pensions flexibility’ consultation, ruling that no further flexibility would be introduced to the NHS pension schemes. The original proposals included new measures to amend the rate at which pensions grow in order to mitigate against annual allowance breaches. This is disappointing for those with higher incomes, tied into making set pension contributions.

If we can help you establish your own position, please do get in touch.


Dr Benjamin Holdsworth is director of Cavendish Medical – specialist financial planners for medical professionals in the NHS or private practice. For a second opinion on your finances, please contact us on 020 7636 7006.

The content of this article is for information only and must not be considered as financial advice. Cavendish Medical always recommends that you seek independent financial advice before making any financial decisions. 

Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor. The value of investments and the income from them can fluctuate and investors may get back less than the amount invested.