31 May 2022
Following a Freedom of Information (FOI) request by Quilter, the wealth manager and financial adviser, it has emerged that April 2022 saw a record number of pension benefits being awarded to NHS staff, indicating a significant jump in those retiring.
April 2022 saw 8,902 pension awards compared to just 6,932 in April 2021, a year-on-year increase of 28% piling yet more pressure on the NHS as it emerges from the pandemic.
While there are a number of reasons that someone would be awarded their pension benefits, the most common is that they are retiring.
Total number of pension awards per month since 2008
This new data shows a worrying trend emerging over the last four months of increasing year on year numbers, which could be the tip of the iceberg.
The number of NHS members being awarded their pension benefits has been steadily increasing this year.
- Jan 21 (4538) to Jan 22 (4698) - 3.5% increase
- Feb 21 (3147) to Feb 22 (3386) - 7.6% increase
- Mar 21 (3300) to Mar 22 (3837) -16.3% increase
- Apr 21 (6932) to Apr 22 (8902) -28.4% increase
We are specifically concerned that there are a number of issues that could lead to even more pressures on NHS workforce, unless government takes steps to resolve them.
For instance, paying annual allowance charges because of inflation will be the “straw that breaks the camel’s back” for many senior healthcare workers and we could see significant upward trends in the number of those members leaving the NHS.
But this is not restricted to higher earners. The problem may get even worse when the expiry of Coronavirus Act powers risks triggering thousands of nurses and doctors to leave the NHS to avoid a financial penalty.
During the pandemic one of the measures brought in to help the NHS cope was the suspension of abatement rules which meant that recently retired NHS staff were allowed to return to work and tackle the pandemic without suffering a penalty on their pension until March 2022. However, following a campaign from Quilter, the suspension of the abatement rules was extended to October 2022, although this may need to be extended again as employers start to look at autumn’s job planning. At the time, another FOI from Quilter highlighted that 7,000 doctors and nurses may retire to avoid the penalty once the rules were back in place.
Graham Crossley, NHS pension specialist at Quilter:
“Although our data does not delve into the specific reasons for the exodus from the NHS, we are hearing that healthcare workers are simply exhausted, feel undervalued and want out of the NHS for a better quality of life.
“It has been said that chronic workforce shortages are seriously undermining efforts to recover from the pandemic. The situation could become significantly worse if the calls to address issues with NHS pensions go unheeded.
“We are already seeing the upward trends in the number of members retiring early or retiring at 60, when once they might have considered continuing to work past their original normal retirement age. The perverse rules, such as the upcoming disastrous tax bills due to inflation, serve to hasten decisions to leave the NHS.
“The whole taxation system needs careful review by both HMRC and the DHSC but, at the very least, there are two issues that can be quickly resolved. The upcoming end of the suspension of abatement rules needs to be extended indefinitely and s235(3) Finance Act 2004 needs to be amended so that annual allowance only measures growth above inflation, as intended. This will help to ensure the NHS can tackle the growing backlog.”
