Alec Collie, head of medical at Wesleyan, the specialist financial services mutual for doctors.
The new year has seen confusion and disruption for some members of the NHS Pension Scheme (NHSPS).
The cause has been errors with, or delays in receiving, two critical documents: the Pension Saving Statement (PSS) or Remediable Pension Saving Statement (RPSS).
Here, we’ll explore the background to these issues, and what scheme members should be doing now if they haven’t acted already.
Pension Saving Statements (PSS)
The NHS pension scheme is obliged to send you a PSS if the growth in your pension has exceeded the standard annual allowance, which is currently £60,000.
But this year there have been widespread reports of significant delays in PSS arriving – with many not having reached members even now, despite being originally due last October. There have also been reports of a number of PSS containing errors.
The immediate issue of these problems has been on self-assessment tax returns, which were due on the 31 January 2025.
While some members will not have been aware at all that they needed to register for self-assessment or complete a tax return because of these problems, others will have had to declare a provision figure on their tax return, which may or may not prove to be accurate.
What should you do now if you’re in either of these situations?
If you weren’t registered for self-assessment and didn’t do so because you didn’t think you had to but later find out you should have done upon receiving your PSS, then you need to notify His Majesty’s Revenue and Customs (HMRC). There may be a penalty applied, but HMRC has said it will consider ‘reasonable excuses’ if a penalty is appealed.
If you were registered for self-assessment and submitted a return but didn’t include a provisional figure because you had reasonable grounds to think you hadn’t breached the annual allowance and later find out that you did, then you need to notify HMRC to update your tax return. You won’t be charged a late filing penalty, but you may be charged interest on the outstanding amount that you owed.
If you submitted a self-assessment form by the 31 January deadline and included an estimated pension growth figure because you either didn’t have, or didn’t want to rely upon, your PSS, you can still update your return once you receive your PSS and / or know your accurate pension details. You must do this within 12 months of 31 January 2025.
Again, you will not incur a penalty for any incorrect provisional figures you originally submitted, however you may be charged interest if the revised figure is greater than your original estimate.
RPSS
The second document that has been disrupted is the Remediable Pension Savings Statement, or RPSS.
Similar to the PSS, the RPSS is an annual allowance statement that is sent to scheme members to help them understand their pension growth and pension input amounts.
But an RPSS is specific to those members who are affected by the McCloud remedy – the government’s ongoing effort to address age discrimination that arose as part of reforms to public sector pensions in 2015.
The government’s solution to the discrimination is to allow affected NHSPS members who had service between 1 April 2015 and 31 March 2022 – a window of time known as the ‘remedy period’ – to temporarily return to ‘legacy’ pension schemes (either the 1995 pension scheme or the 2008 section).
As part of this, all affected members had any service they’d built up in the 2015 pension scheme put back into their legacy schemes. Any members still active as of the 1 April 2022 were moved into the 2015 schemes.
Some members’ tax position will have changed for the tax years 2015/16 through 2021/22 because their remedy period pensionable service has been moved back into the legacy schemes. This means that some will need to update their tax information with HMRC – and this is what the RPSS will enable them to do. They’ll be able to claim back annual allowance tax paid, while a small number may need to pay extra tax.
There has been a delay in issuing RPSS to members that require them. The NHSPS expects to have sent the majority out before the end of February 2025, but a small number may take a little longer. There have also been some that were issued that have contained errors.
If you received a correct and timely RPSS, you had to check your tax position using HMRC’s online ‘Calculate your public service pension adjustment’ tool by 31 January 2025. This tool will tell you if your pension tax position has changed, and work out whether you need to pay any more tax or get a refund.
However, if your RPSS was inaccurate, you should now have received a letter from the NHS to let you know. A new RPSS will now be sent to you, and you will have three months to complete it when it arrives.
Because this is part of McCloud and relates to Annual Allowance, not everyone will receive an RPSS – so you shouldn’t necessarily worry if you haven’t yet. If you think you should have received one and haven’t, you can contact the pension scheme for confirmation.
Clearly, this is a complex issue. If you are unsure about how you are affected by the McCloud judgement, or have questions about your PSS or RPSS, you can get more information NHS Business Services Authority website here.
Or, speak to a financial adviser who specialises in the NHSPS, you can contact us here. To find more information about McCloud and your pension, visit our hub here.
PCC is working with Wesleyan and a local medical committee to deliver pension information webinars to GPs, for more information contact enquiries@pcc-cic.org.uk.
