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<p>For the majority of people, their pension contributions are tax-free. This makes
pensions tax relief one of the most expensive reliefs in the personal tax system.
The reforms to the lifetime and annual allowance made in the previous two parliaments
are expected to save over £6 billion per year and are necessary to deliver a fair
system and protect public finances. Less than 1% of pension savers will have to reduce
their saving or face an annual allowance charge as a result of the tapered annual
allowance.</p><p>While there are no plans to compensate senior National Health Service
staff who exceed their tax-free pension savings allowances, the Scheme Pays facility
is there to assist NHS Pension Scheme members who breach the annual allowance, and
allows them to settle their lifetime and annual allowance charges without making an
upfront payment. The Scheme Pays facility was recently extended to cover tax charges
of any amount and those arising from the tapered annual allowance.</p><p>The Government
has launched a full public consultation setting out proposals to make the NHS Pension
Scheme more flexible for clinicians, to give them more control over their pension
growth and tax liabilities.</p>
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