Almost half of NHS employees lack annual allowance understanding

Almost half (43 per cent) of NHS employees consider themselves to have a low understanding of the annual allowance, according to research by First Actuarial.

The survey also found that only 17 per cent of respondents had a high understanding of the annual allowance, despite 56 per cent of respondents thinking they’d be affected by an annual allowance breach in the future.

This follows a freedom of information request from Quilter, which found that 84,048 NHS pension scheme members had exceeded their annual allowance between 2013/14 and 2017/18.

The annual and tapered allowances have drawn attention after causing issues for NHS staff members which saw some doctors cutting back hours and retiring early to avoid pensions taxation.

The government confirmed interim plans to relieve the crisis in November 2019, and also pledged an ‘urgent review’ of the tapered allowance in its election manifesto.

The research found that two in three respondents intended to take, or have already taken, financial advice on their pensions tax position following the recent issues around pensions tax.

However, almost a quarter (21 per cent) of respondents had not accessed their total reward statement over the past two years to look at their pension benefits.

In response to the issues stemming from pensions tax, 44 per cent of respondents were considering reducing their hours while 40 per cent were considering reducing additional work.

This is in addition to the 42 per cent of respondents who have already reduced additional work and the 18 per cent that have also already reduced their hours.

Despite 39 per cent of respondents currently having taken no action in response, the survey also showed an emerging trend, with 35 per of those surveyed considering opting out of the NHS pension scheme in future, and a further 26 per cent considering leaving the NHS altogether.

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