If you opted out of the NHS Pension Scheme between April 2015 and March 2022, you’re not alone – and thanks to changes following the McCloud judgement, you might now have the chance to buy back the pension service you missed.
So, what does this all mean?
What is the McCloud judgement?
The McCloud judgement found that public sector pension reforms introduced in 2015 unfairly discriminated against some members based on age. To address this, the government introduced the Public Service Pensions Remedy (PSPR), also known as the McCloud Remedy.
As a result, any NHS Pension Scheme member who joined before 1 April 2012 and remained active (or returned within five years) will have their service during the remedy period – April 2015 to March 2022 – rolled back from the 2015 Scheme to the legacy 1995/2008 Scheme.
What if you opted out during this period?
If you left the scheme because of the 2015 reforms – perhaps you felt the new scheme was less beneficial – you may have made what’s now called a contingent decision.
A contingent decision is when you took (or didn’t take) an action based on what you understood at the time but may have acted differently if you’d known you would remain in the 1995/2008 Scheme for the remedy period.
Examples include:
- Choosing to opt out of the scheme altogether.
- Choosing to opt out on an ad hoc basis to avoid pension taxation
- Cancelling Added Years or Additional Pension arrangements.
The good news is that you may now be eligible to apply to buy back the lost service. This process is now available across England, Wales, and Scotland.
How do you buy back service?
NHS Pensions has introduced online calculators to help you estimate the cost of reinstating your remedy period service.
Try the calculator on the NHSBSA website
There are two ways to pay:
- Directly from your pension benefits – either from your lump sum or through deductions to your regular pension.
- In instalments over a period that suits your budget.
What about ERRBO?
If you paid Early Retirement Reduction Buy Out (ERRBO) contributions between April 2015 and March 2022, you’ll also be contacted by NHS Pensions. This applies to members who were in the 2015 Scheme during the remedy period but are now being rolled back to the legacy 1995/2008 Scheme.
ERRBO is not available under the legacy scheme, so you’ll need to decide what to do with those contributions.
There are two main options:
- Wait until retirement. If you later choose to take your benefits under the 2015 Scheme for the remedy period, you can use your ERRBO contributions as originally intended. If you choose to stay with the 1995/2008 Scheme, you can either convert the contributions into additional pension or have them refunded with interest.
- Request a refund now. This means you’ll no longer be able to use those contributions if you later choose 2015 benefits for the remedy period.
You’ll receive a letter from NHS Pensions with a detailed explanation of your options and how much you’ve contributed.
What should you do next?
There are many reasons why you may want to buy back service following the McCloud judgement – or review your ERRBO contributions – but these decisions can be complex and the financial implications significant.
That’s why seeking independent financial advice is so important. A qualified adviser can help you:
- Understand the long-term impact on your pension
- Compare your options
- Make confident, well-informed decisions
Need help?
Chase de Vere has decades of experience supporting NHS professionals with their pension planning. If you’re unsure about what the McCloud remedy means for you or how to make the most of your options, we’re here to help.
This information is based on our understanding of legislation, whether proposed or in force, and market practice at the time of writing. Levels, bases and reliefs from taxation may be subject to change.
Content correct at time of writing.