Over 7,000 NHS staff may be triggered to leave the NHS to avoid a pension penalty, due to the expiration of Coronavirus Act powers in March, Quilter has warned.

The temporary measure, implemented last year in response to the Coronavirus pandemic, allowed recently retired NHS staff to return to work without incurring a penalty on their pension but will come to an end on 24 March.

Some members of the NHS pension scheme are allowed to retire at age 55 without any reduction to their pension.

On re-employment in the NHS, their NHS pension is reduced pound for pound if their earnings plus the ’unearned’ element of their NHS pension exceed their pre-retirement NHS pensionable earnings, known as ‘abatement.’

According to Quilter, data from the NHS Business Services Authority (NHSBSA) showed that it had mailed 10,729 NHS pension scheme members in relation to the upcoming legislative changes, of which 7,470 could be adversely impacted by the return of abatement.

Of these 7,470, 3,158 were abated prior to the temporary suspension and will be again after the Coronavirus Act expiration. The remaining 4,312 had retired after 25 March 2020 and would normally have been abated but were not, due to the changes. These people will now be abated when the regulations apply again next year.

The remaining 3,259 will not be affected when the regulations apply again, having turned 60 since the introduction of the temporary suspension.

Commenting on the NHSBSA data, Quilter NHS pension specialist, Graham Crossley, warned: “There is a real risk of thousands of doctors and nurses leaving the NHS unless urgent action is taken.

“Although recent headlines about the pandemic have been more positive, there are still significant pressures on the NHS and the prospect of thousands of NHS staff leaving in March to understandably avoid a financial penalty will add to an already challenging situation.

“There is an easy fix to this looming problem.

“The Coronavirus Act 2020 includes to allow the extension to any of the powers contained within the bill and this issue should be raised urgently in government.

“While it is good to see that this problem is being debated in the House of Commons, [Minister of state for Health] Edward Agar’s comment that the department will keep it under review is not good enough as time is running short.

“Many workers have already received their letters and will need to make their decisions now as to whether they will keep working after 25 March.”

The problem was brought up in parliamentary questions on 10 January when Labour MP, Gill Furniss, asked whether changes to the abatement rules were being considered.

In response to her question, Agar said that “the department will keep this under review”.

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