Everything you need to know about the McCloud Remedy

What is the McCloud Remedy?

When the 2015 NHS Pension Scheme was first introduced, older scheme members (those within ten years of retiring) were allowed to continue in their original 1995 or 2008 NHS sections.

In 2018, the Court of Appeal found this to be discriminatory against younger members in a case brought by judges (named McCloud) and firefighters.

The government has agreed to redress this discrimination across all public sector pension schemes in a move expected to cost around £17billion.

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What does the government's McCloud consultation mean for you?

Everyone who is impacted by this issue will receive ‘compensation’ benefits and can choose whether these will be from their previous 1995 / 2008 pension scheme or from the 2015 scheme for the ‘remedy’ period which will run from 1 April 2015 to 31 March 2022.

The McCloud remedy consultation held last year concluded that doctors (and other public sector employees) have the right to make a ‘deferred choice’ of which remedy benefits to take rather than an ‘immediate choice’.

This means that if you are affected by the McCloud age discrimination issue, you can make your decision about which set of remedy benefits you would like to take at the time of your retirement. This means you can calculate which set of benefits are the most valuable to you at the time.

What do you need to be aware of?

The government is now working on the official McCloud remedy legislation but this is not scheduled to be in place until October 2023.

If you retire (or have already retired) before the new legislation has been introduced, you will be contacted to make your choice retrospectively. Your remedy payments will then be backdated to the time when your benefits became payable.

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What should you do now?

It is important to establish that your figures relating to pay and pensions are correct. We see many mistakes which can have a substantial impact on your eventual figures. You may have to rework the last seven years of tax calculations and annual allowance figures based on the McCloud remedy update.

As more detail of the remedy processes are given, you will want to be in the best position to make suitable decisions.

For more information, please call our adviser team on 020 7252 5765, watch one of our helpful videos or book a space on a forthcoming webinar.

Watch our NHS McCloud Remedy webinar for free

This session was hosted by chartered financial planner Joseph Awaritefe and covers the following key topics:

  • Annual Allowance rules up until the end of 19/20 tax year
  • Paying tax charges including Scheme Pays options
  • Claiming government compensation for tax charges in the 19/20 tax year
  • Impact of new Annual Allowance rules from the 2020/21 tax year
  • How the McCloud Judgement may affect your Annual Allowance figures

Speak to a specialist NHS Annual Allowance adviser

To arrange a complimentary consultation with one of our team, please use this contact form or phone 020 7252 5765.