On the go: The government has temporarily suspended tax rules that could have seen returning NHS workers hit with a significant tax charge on their pensions income.
In a written ministerial statement, economic secretary to the Treasury John Glen announced that the government had made further changes to abatement rules, in a bid to ensure there is no negative impact on the pensions of workers returning to the frontline to help tackle coronavirus.
However, the temporary suspension of the rules – which affect retired individuals aged between 50 and 55 – will only apply to payments made from March 1 to June 1 2020 and to people returning to roles as a result of Covid-19.
This tax rule in question relates to protected pension changes for individuals who return to the same line of work within six months of retiring.
A protected pension age was available for members who before April 6 2006 had a right to take their pension benefits at an earlier pension age than the current rules allow.
However, a member with a protected pension age of less than 50, who takes a pension before they reach the current minimum pension age of 55, may have their lifetime allowance reduced and could be at risk of a significant tax bill if they breach this.
People could also lose their protected pension age if they returned to the same job after retirement.
