The National Health Service Pension Schemes (Amendment) Regulations 2025
The National Health Service Pension Schemes (Amendment) Regulations 2025 amend multiple NHS pension scheme regulations, primarily correcting errors and inconsistencies, updating tax provisions following the abolition of the lifetime allowance, improving leave provision, and enhancing calculation accuracy.
These changes affect various NHS pension schemes introduced in 1995, 2000, 2008, and 2015, with several provisions applied retrospectively.
Arguments For
Improved accuracy and fairness in pension calculations: The regulations correct errors and inconsistencies in existing NHS pension schemes, leading to more accurate calculations of pensionable pay and service for various member groups.
Addressing legislative changes: The amendments incorporate changes resulting from the abolition of the lifetime allowance for pension tax, ensuring compliance with current legislation and providing clarity for scheme administrators and members.
Enhanced leave provisions: Inclusion of neonatal care leave alongside other forms of authorized absence ensures greater inclusivity and reflects modern employment practices.
Legal and historical basis for amendments: The regulations are made under the authority of the Superannuation Act 1972, the Public Service Pensions Act 2013, and the Public Service Pensions and Judicial Offices Act 2022, providing a clear legal framework for the changes.
Arguments Against
Retrospective application of certain provisions: The retrospective application of some amendments might present challenges for scheme administrators in recalculating past benefits and contributions.
Complexity of amendments: The numerous amendments across several schemes may increase complexity for both administrators and members in understanding their pension entitlements.
Potential administrative burden: The detailed requirements for information gathering and calculation, especially concerning tax implications and various leave types, may place an administrative burden on employers and scheme managers.
Unintended consequences: While the intent is to improve accuracy and fairness, complex interactions between the amendments and the underlying legislation could create unintended consequences that aren't immediately apparent.
The Secretary of State for Health and Social Care makes these Regulations in exercise of the powers conferred by sections 10(1) and (2) and 12(1) and (2) of, and Schedule 3 to, the Superannuation Act 1972 (“the 1972 Act”), sections 1(1) and (2)(e), 2(1) and 3(1) to (3) of, and paragraph 5(a) of Schedule 2 and Schedule 3 to, the Public Service Pensions Act 2013 (“the 2013 Act”) and sections 10(1) and 11(1) and (5) of the Public Service Pensions and Judicial Offices Act 2022 (“the 2022 Act”).
In accordance with section 10(1) of the 1972 Act and section 3(5) of the 2013 Act, these Regulations are made with the consent of the Treasury.
In accordance with section 10(4) of the 1972 Act and section 21(1) of the 2013 Act, the Secretary of State has consulted such persons or representatives of such persons as appear to the Secretary of State likely to be affected by these Regulations.
In accordance with section 22(2)(a) of the 2013 Act, the Secretary of State has consulted such persons or representatives of such persons as appear to the Secretary of State likely to be affected by regulations 1(5), (7) and (8), 24(5), (6), (7), (8)(b), (9) and (10), 25, 26, 31, 38, 39 and 40 with a view to reaching agreement with them.
In accordance with section 22(2)(b) of the 2013 Act, the Secretary of State has laid a report before Parliament in relation to those regulations.
The Secretary of State for Health and Social Care created these regulations using powers granted by several acts of Parliament: the Superannuation Act 1972, the Public Service Pensions Act 2013, and the Public Service Pensions and Judicial Offices Act 2022.
Treasury consent was obtained, and consultations occurred with stakeholders potentially affected by the regulations, with a parliamentary report filed for select regulations.
These Regulations may be cited as the National Health Service Pension Schemes (Amendment) Regulations 2025.
These Regulations come into force on 1st April 2025, subject to paragraph (3).
Regulations 22, 24(2), (3), (4) and (8)(a), 28, 30, 32(4) and 34(3) come into force on 6th April 2025.
Regulations 13 and 19 have effect retrospectively from 1st April 2008.
Regulations 9, 12, 16, 18, 24(5), (6), (7), (8)(b), (9) and (10) and 33 have effect retrospectively from 1st April 2015.
Regulations 8, 11, 15 and 17 have effect retrospectively from 6th April 2020.
Regulations 25, 26 and 31 have effect retrospectively from 1st October 2022.
Regulations 39 and 40 have effect retrospectively from 1st April 2023.
Regulations 4, 6, 14, 20 and 29 have effect retrospectively from 6th April 2024.
These Regulations extend to England and Wales.
The regulations are officially titled the 'National Health Service Pension Schemes (Amendment) Regulations 2025'.
Most come into force on April 1st, 2025, except for some which take effect on April 6th, 2025; others apply retrospectively from various dates between 2008 and 2024.
The geographical scope covers England and Wales.
The National Health Service Pension Scheme Regulations 1995 are amended in accordance with this Part.
In regulation C1 (meaning of “pensionable pay” and “final year’s pensionable pay”), after paragraph (12) insert—
“(13) Paragraphs (14) to (20) apply to a member who has remediable service within the meaning of section 1 of the Public Service Pensions and Judicial Offices Act 2022 that is pensionable service under this Section of the scheme by virtue of section 2(1) of that Act (remediable service treated as pensionable under Chapter 1 legacy schemes) and whose pensionable pay and pensionable service under this Section of the scheme is derived from contributions made to the 2015 Scheme in the relevant scheme years in respect of that remediable service, if— (a) at any time during that period of service, the terms of the member’s employment contract required the member to work less than whole-time, according to those terms, for any period of time; and (b) the member received a relevant payment. (14) The member, or if the member is deceased, the member’s personal representatives, may elect for all relevant payments to be included as pensionable pay for the purposes of this regulation, and for service in respect of that pensionable pay to be included in the member’s pensionable service for the purposes of regulation C2. (15) The member’s employing authority must, before 1st January 2026, or in exceptional circumstances such later time as the scheme manager decides, send a notice in writing to the member, or as the case may be, the member’s personal representatives, that they may make an election under paragraph (14). (16) The notice referred to in paragraph (15) must specify the amount of contributions the member and the member’s employing authority will be required to pay, and the amount of pensionable pay and pensionable service the member will be entitled to in respect of those contributions, if the member or as the case may be, the member’s personal representatives, makes an election under paragraph (14). (17) An election under paragraph (14) must be— (a) made— (i) by the member, or as the case may be, the member’s personal representatives, in writing, in such form and including such information as the member’s employing authority requires; and (ii) in respect of all relevant payments received by the member; and (b) received by the member’s employing authority before— (i) the end of the period of three months beginning with the day on which the member is provided with the notice under paragraph (15); or (ii) such a later date before 1st July 2026 as the member’s employing authority considers reasonable in all the circumstances. (18) For the purposes of this regulation, a relevant payment means so much of a payment of salary, wages, fees or other regular payment made to a member by the employing authority— (a) in respect of any period of time worked by the member in excess of the work required by the terms of their employment contract described in paragraph (13)(a) up to the whole-time equivalent according to the terms of the member’s employment contract during a scheme year falling within the period of the member’s remediable service; and (b) that was treated by the member’s employing authority as a payment for overtime for the purposes of regulation 27 of the 2015 Scheme. (19) Where a member, or as the case may be, the member’s personal representatives, has made an election under paragraph (14), that member will be treated as if they had also made an election under regulation 27A(2) of the 2015 Scheme (election for relevant payments to be included as pensionable earnings). (20) If a member, or as the case may be, the member’s personal representatives, does not make an election under paragraph (14), all relevant payments made to that member will be treated as payments for overtime for the purposes of this regulation.”
This part amends the 1995 National Health Service Pension Scheme Regulations.
Specifically, it adds a new clause to regulation C1, clarifying how to calculate 'pensionable pay' for part-time workers with 'remediable service' (service previously not contributing to their pension but now eligible).
This allows those workers, or their representatives if deceased, to elect to include relevant overtime payments in their pension calculations, providing a retroactive option subject to a deadline.
Regulation T2A (deduction of tax: further provisions) is amended as follows.
In paragraph (2), after “these Regulations” insert “before 6th April 2024”.
After paragraph (2A) insert—(2B) Subject to paragraph (2C), if a person’s entitlement to a lump sum under these Regulations, on or after 6th April 2024, constitutes a relevant benefit crystallisation event for the purposes of section 637Q or section 637S of the Income Tax (Earnings and Pensions) Act 2003, the scheme administrator shall determine— (a) where any tax is payable in respect of the benefit in accordance with section 204 of the 2004 Act and, if so, (b) the amount of tax, and (c) the person liable for that tax. (2C) The member’s lump sum in respect of which any tax is payable, as determined under paragraph (2B), shall be reduced by an amount that fully reflects the amount of tax paid by the scheme administrator.
In paragraph (7), after “these Regulations” insert “before 6th April 2024”.
After paragraph (7) insert—(7A) Where a person is entitled to a lump sum under these Regulations, on or after 6th April 2024, whether or not he intends to rely on entitlement to transitional protection, or to enhanced protection, that person shall give to the scheme administrator such information as will enable the scheme administrator to determine— (a) whether any tax is payable in respect of the lump sum in accordance with section 204 of the 2004 Act and, if so, (b) the amount of tax, and (c) the person liable for that tax.
In paragraph (8)— (a) for “If” substitute “Where”; (b) for “applying for” substitute “entitled to”; (c) after “these Regulations” insert “before 6th April 2024”.
After paragraph (8) insert—(8ZA) Where a person who is entitled to a lump sum under these Regulations, on or after 6th April 2024, intends to rely on entitlement to an enhanced allowance by virtue of the provisions listed in section 256(1) of the 2004 Act (enhanced allowance regulations), that person shall give to the scheme administrator— (a) the reference number issued by the Commissioners under the Registered Pension Schemes (Enhanced Lifetime Allowance) Regulations 2006 in respect of that entitlement; and (b) the information referred to in paragraph (7A).
In paragraph (8A)— (a) for “If” substitute “Where”; (b) for “claiming” substitute “entitled to”; (c) after “these Regulations” insert “before 6th April 2024”.
After paragraph (8A) insert—(8AA) Where a person who is entitled to a lump sum under these Regulations, on or after 6th April 2024, intends to rely on entitlement to transitional protection in accordance with paragraph 14 of Schedule 18 to the 2011 Act or paragraph 1 of Schedule 22 to the Finance Act 2013, that person shall give to scheme administrator— (a) the reference number issued by the Commissioners under The Registered Pension Schemes (Lifetime Allowance Transitional Protection) Regulations 2011 or The Registered Pension Schemes and Relieved Non-UK Pension Schemes (Lifetime Allowance Transitional Protection) (Notification) Regulations 2013 in respect of that entitlement; and (b) the information referred to in paragraph (7A).
In paragraph (8B)— (a) for “If” substitute “Where”; (b) for “claiming” substitute “entitled to”; (c) after “these Regulations” insert “before 6th April 2024”.
After paragraph (8B) insert—(8C) Where a person who is entitled to a lump sum under these Regulations, on or after 6th April 2024, intends to rely on entitlements to individual protection in accordance with paragraph 1 of the Schedule 6 of the Finance Act 2014, that person shall give to the scheme administrator— (a) the reference number issued by the Commissioners under The Registered Pension Schemes and Relieved Non-UK Pension Schemes (Lifetime Allowance Transitional Protection) (Individual Protection 2014 Notification) Regulations 2014 in respect of that entitlement, and (b) the information referred to in paragraph (7A).
In paragraph (9)— (a) after “paragraph” in the second place it occurs insert “(7A),”; (b) after “(8)” insert “(8ZA),”; (c) after “(8A)” insert “,(8AA),”; (d) after “(8AA),” omit “or”; (e) after “(8B)” insert “or (8C)”.
In paragraph (10)— (a) for “the” substitute “a”; (b) after “person” insert “who is entitled to a benefit under these Regulations, before 6th April 2024”.
After paragraph (10) insert—(10A) Where a person who is entitled to a lump sum under these Regulations, on or after 6th April 2024, fails to provide all, or part of, the information referred to in paragraph (7A) or, as the case may be, paragraph (8ZA), (8AA) or (8C) within the time limits specified, the scheme administrator may deem that the person is liable for the tax payable in respect of the whole of the lump sum.
Regulation 4 amends regulation T2A, which deals with tax deductions.
The amendments clarify tax calculations for lump sums received on or after April 6th, 2024, incorporating requirements related to the abolition of the lifetime allowance for pension tax.
New subsections are added, outlining the scheme administrator's role in determining tax liability and recipients' obligations to provide necessary information.