New data suggests there were a record number of NHS retirements in April, with the number of people receiving NHS pensions rising by 28 per cent year on year, to hit an all-time high.
In total there were 8,902 pension awards in April 2022, compared to just 6,932 in April 2021. There are concerns that an increase in the number of people retiring is likely to pile yet more pressure on the over-stretched service as it emerges from the pandemic.
This information follows a freedom of information (FOI) request by wealth manager Quilter. It says that while there are a number of reasons that someone would be awarded their pension benefits, the most common is that they are retiring.
This new data also shows a worrying trend emerging over the last four months of increasing year on year numbers. These figures show:
- Jan 21 (4,538 pension awards) to Jan 22 (4,698) — a 3.5 per cent increase
- Feb 21 (3,147 pension awards) to Feb 22 (3,386) — a 7.6 per cent increase
- Mar 21 (3,300 pension awards) to Mar 22 (3,837) — a 16.3 per cent increase
- Apr 21 (6,932 pension awards) to Apr 22 (8,902) — a 28.4 per cent increase
Quilter says it is concerned that there are a number of issues that could lead to even more pressures on NHS workforce, unless government takes steps to resolve them.
For instance, it says paying annual allowance charges because of inflation will be the “straw that breaks the camel’s back” for many senior healthcare workers and we could see significant upward trends in the number of those members leaving the NHS.
But this is not restricted to higher earners. The problem may get even worse when the expiry of Coronavirus Act powers risks triggering thousands of nurses and doctors to leave the NHS to avoid a financial penalty.
During the pandemic one of the measures brought in to help the NHS cope was the suspension of abatement rules which meant that recently retired NHS staff were allowed to return to work and tackle the pandemic without suffering a penalty on their pension until March 2022.
However, following a campaign from Quilter, the suspension of the abatement rules was extended to October 2022, although this may need to be extended again as employers start to look at autumn’s job planning.
At the time, another FOI from Quilter highlighted that 7,000 doctors and nurses may retire to avoid the penalty once the rules were back in place.
Quilter NHS pension specialist Graham Crossley says: “Although our data does not delve into the specific reasons for the exodus from the NHS, we are hearing that healthcare workers are simply exhausted, feel undervalued and want out of the NHS for a better quality of life.
“It has been said that chronic workforce shortages are seriously undermining efforts to recover from the pandemic. The situation could become significantly worse if the calls to address issues with NHS pensions go unheeded.
“We are already seeing the upward trends in the number of members retiring early or retiring at 60, when once they might have considered continuing to work past their original normal retirement age. The perverse rules, such as the upcoming disastrous tax bills due to inflation, serve to hasten decisions to leave the NHS.
“The whole taxation system needs careful review by both HMRC and the DHSC but, at the very least, there are two issues that can be quickly resolved. The upcoming end of the suspension of abatement rules needs to be extended indefinitely and s235(3) Finance Act 2004 needs to be amended so that annual allowance only measures growth above inflation, as intended. This will help to ensure the NHS can tackle the growing backlog.”