NHS: Workplace Pensions
(asked on 15th December 2025) - View Source
Question to the Department of Health and Social Care:
To ask the Secretary of State for Health and Social Care, how his Department is supporting senior NHS staff in West Dorset constituency who face large Annual Allowance charges due to extra hours worked during staffing shortages.
The annual allowance limits the amount that an individual can save in their pension pot before they have to pay tax. It aims to ensure that the incentives for pension saving, which are costly to the taxpayer, are appropriately targeted across society. Tax policy, including the level of the annual allowance, is a matter for my Rt. Hon. Friend, the Chancellor of the Exchequer.
From 6 April 2023, the previous administration introduced reforms to the annual allowance, increasing both the standard and tapered annual allowances, allowing National Health Service staff to save more into their pensions each year before facing a tax charge.
Where NHS staff have pension savings that exceed the annual allowance, for example due to unexpected circumstances such as taking on extra hours or additional responsibilities within the NHS, they can carry forward any unused annual allowance from the previous three tax years. This will increase their current year’s allowance, reducing or potentially avoiding any annual allowance tax charge that is due.
Additionally, the NHS Pension Scheme offers a Scheme Pays facility which allows impacted members to pay charges using the value of their pension. This spreads the cost of paying a tax charge over the lifetime of the pension rather than requiring an immediate outlay. For most members, the growth in their pension benefits at retirement, even net of a charge, would still represent an excellent return on their pension contributions.
Information for trusts is available on NHS Employers website, which is available at the following link:
https://www.nhsemployers.org/publications/annual-allowance.
Information for members is available on the NHS Pensions website, which is available at the following link: