In the Spring Statement, the Chancellor Rishi Sunak announced a 1p cut in basic income tax – but not until 2024 – and a sizeable hike in the National Insurance threshold.
There was also an announcement from the Office for Budget Responsibility (OBR) on the costs involved in implementing the McCloud remedy.
The McCloud remedy sets out how the government will make up for the deemed ‘age discrimination’ caused by moving some legacy scheme members to the 2015 scheme but not those who were within ten years of retiring at the time.
NHS members voted for a ‘deferred choice underpin’ following the McCloud remedy consultation which means members can choose which benefits they would like to claim for the ‘remedy period’ from 2015 to 2022. The choice is between those from their legacy scheme (likely to be more lucrative) or those from their current scheme. The ‘deferred’ part of the choice means they will not have to decide until the time comes to draw their benefits.
In the Spring Statement, the OBR confirmed that the government will provide ‘tax-free compensation and that members will not bear the cost of additional annual allowance charges’ in the year of retirement.