The McCloud Remedy and Your NHS Pension: A Plain-English Guide

The McCloud remedy is the fix for age discrimination in public service pension reforms introduced in 2015. When the new career average schemes started, older members were protected and stayed in their old final salary schemes, while younger members were moved across. The courts found this discriminated against younger members. The remedy puts that right, and it affects a large number of NHS staff.

This is a general overview, not personal advice. NHS Pensions can give you details for your own record.

The background

In April 2015 the NHS Pension Scheme changed from the final salary 1995 and 2008 sections to a career average 2015 scheme. Members who were within ten years of their normal pension age on 1 April 2012 stayed in the old scheme. Others were moved to the 2015 scheme, either straight away or after a tapering period.

In the McCloud case, which involved judges, and the related firefighters' case, the courts ruled that this protection was age discrimination. The government accepted that the ruling applied to all public service schemes, including the NHS.

The remedy period

The remedy covers service from 1 April 2015 to 31 March 2022. During this period, eligible members are treated as having stayed in their legacy scheme. From 1 April 2022, all active members build their pension in the 2015 scheme, regardless of age.

Who is affected?

You are usually in scope if:

• you were a member of the 1995 or 2008 section on or before 31 March 2012, and
• you had service in the NHS Pension during the remedy period, and
• you did not have a break in membership of more than five years in between

If you joined after 31 March 2012, the remedy does not apply to you, because you were never eligible for protection.

What changes for affected members

Your service during the remedy period has been moved back to your legacy scheme, the 1995 or 2008 section. When you take your benefits, you will choose whether that service is paid as:

• legacy scheme benefits, with the 1995 or 2008 rules, or
• 2015 scheme benefits, for the period from 2015 to 2022

This is often called the deferred choice underpin. Members who had already retired, or who had died, before the remedy came in were given an immediate choice instead.

What is a Remediable Service Statement?

NHS Pensions issues a Remediable Service Statement (RSS) to affected members. It shows estimated benefits for your remedy period service under both options, so you can compare them. When you retire, you will make the final choice based on figures produced at the time.

Check your statement carefully, and contact NHS Pensions if your pensionable pay or service looks wrong.

Which option is better?

It depends on your circumstances:

• 1995 or 2008 benefits can be better for people who had large pay rises later in their career, because they link to final salary. The 1995 section also has a normal pension age of 60 for most members.
• 2015 benefits can be better for people whose pay stayed level or who worked part time later, because each year builds its own pension and is revalued above inflation.

The lump sum rules also differ. The 1995 section includes an automatic lump sum, while the others let you give up pension for a lump sum.

Contributions and tax adjustments

Moving remedy period service between schemes can change the contributions you should have paid and your annual allowance position in those years. NHS Pensions handles most contribution adjustments. Annual allowance changes may mean revised pension savings statements and, in some cases, refunds or extra charges through HMRC.

What you need to do

1. Keep your contact details up to date with NHS Pensions and your employer.
2. Read your Remediable Service Statement when it arrives.
3. Check your record through the member portal.
4. Take advice if you are close to retirement and the choice is not clear-cut.

Common questions

Do I have to do anything now? Most active members do not need to act until retirement, but you should check your statement and record.

Does it affect my pension from April 2022 onwards? No. All service from 1 April 2022 is in the 2015 scheme.

I left the NHS years ago. Am I affected? You may be, if you meet the conditions. Deferred members also receive statements.

Estimate your pension

The pension retirement calculator projects 2015 scheme benefits, and the pension lump sum calculator shows how giving up pension for a lump sum works.