Changes in your annual allowance following the public service pensions remedy
Check how your annual allowance could have been affected by the public service pensions remedy (also known as McCloud).
If you have been affected by the public service pensions remedy and your benefits have changed during the remedy period (1 April 2015 to 31 March 2022), the amount of your pension savings (pension input amount) will have changed. This could be because you are either a:
- Chapter 1 member who rolled back into a legacy scheme or chose new scheme benefits
- Chapter 2 member makes a legacy scheme election or a taper-protected member makes a 2015 scheme election
These changes could have affected your annual allowance tax charge if (both):
- between 1 April 2015 and 31 March 2022 you incurred or were close to incurring an annual allowance tax charge
- as a result of the remedy, you have a change in your pension input amount
You can use the Calculate your public service pension adjustment service to correct your tax position or calculate any changes in your annual allowance.
If you’re not sure if you’re affected by the public service pensions remedy, you can check if the remedy affects you or read the full guidance on the remedy.
How annual allowance is calculated following the remedy
Chapter 1 members — if you were a member of the new scheme before April 2022
If on 1 October 2023 you have not yet started to take your benefits, any benefits which you built up during the remedy period will be classed as legacy scheme benefits. Your pension input amount for the remedy period will be calculated on the basis that you were a member of the legacy scheme during the remedy period. This means that your pension input amount will change for any year that you were a member of the new scheme. This may mean that your annual allowance tax charge may change.
When you retire or access your benefits, you will have to choose if you want the new scheme or legacy scheme benefits during the remedy period. Your choice will not change your pension input amounts for the remedy period. Your pension input amount for the tax year that you start taking your benefits will only change if you chose new scheme benefits and the pension input amount is lower than the pension input amount for legacy scheme benefits.
If on 1 October 2023 you had started to take some of your benefits or you are the beneficiary of a member who has died on or before this date, you will be given an immediate choice as to whether you receive legacy or new scheme benefits for the remedy period.
Your pension input amount, for tax years that you were a member of the new scheme, will change if you choose legacy benefits.
In most cases, any voluntary contributions made into the new scheme during the remedy period will not be rolled back automatically. This means that the pension input amount of these contributions will not change and will remain within the new scheme.
Your scheme administrator will calculate any changes. If you previously received a pension saving statement, your scheme administrator will send you a revised pension savings statement.
Chapter 1 members — if you did not join the new scheme before April 2022
If on 1 October 2023 you have not yet started to take your benefits, your pension input amounts for the remedy period will not change. When you retire or access your benefits, you will have to choose if you want the new scheme or legacy scheme benefits during the remedy period. Normally this choice will not change your pension input amount.
If on 1 October 2023 you had started to take some of your benefits or you are the beneficiary of a member who has died, you will be given an immediate choice as to whether you receive legacy or new scheme benefits for the remedy period. Your pension input amount will change only if you chose new scheme benefits and the pension input amount is lower than the pension input amount for legacy scheme benefits.
Your scheme administrator will calculate any changes. If you previously received a pension saving statement, your scheme administrator will send you a revised pension savings statement.
Chapter 2 members
The benefit you choose will change your pension input amount if you were either:
- in a legacy scheme and the 2015 scheme
- in the 2015 scheme and choose the legacy scheme benefits
If you make a legacy scheme election
As the legacy scheme is unregistered, there is no pension input amount for your basic scheme benefits. However if you paid voluntary contributions to the 2015 scheme, the benefits for those contributions remain in the 2015 scheme. The benefits from voluntary contributions will have a pension input amount that needs to be tested against your annual allowance. If you were previously given a pension savings statement your scheme administrator will send you a revised one.
If you paid an annual allowance charge, you may be due compensation or repayment of tax. You can do this by making a submission through the Calculate your public service pension adjustment service.
If you make a 2015 scheme election
If you choose the 2015 scheme benefits and were in also in a legacy scheme, your pension scheme administrator will calculate your pension input amounts for the affected years and may send you a pension saving statement .
Chapter 3 members
Your pension input amounts for the remedy period will not normally change retrospectively. If you are a pensioner member and your benefits increased due to the final salary underpin, your pension input amount will decrease only in the year that the underpin occurred. If the change affects you, your pension scheme administrator will contact you.
If you had or were close to having the tapered annual allowance
If you had or were close to having a tapered annual allowance during the remedy period, your threshold and adjustment income may have changed as a result of rollback.
If you are a Chapter 1 member, you will have to recalculate your threshold and adjusted income for years you were in a new scheme. You will need to calculate these amounts based on the contributions you should have paid to the legacy scheme instead of the contributions you actually paid to the new scheme.
If you are a Chapter 2 member who makes a 2015 scheme election, you will have to recalculate your threshold and adjusted income for years you were in a legacy scheme.
You will need to calculate these amounts based on the contributions you should have paid to the 2015 scheme instead of the contributions you actually paid to the legacy scheme.
Your scheme administrator will give you this information if the amount of contributions payable is different to the amount you paid.
Check if you have new or additional tax charges between the 2019 to 2020 and 2021 to 2022 tax years
You can check if you have a new or additional annual allowance charges between the 2019 to 2020 and 2021 to 2022 tax years.
All changes to tax charges as a result of the public service pensions remedy must be submitted through the Calculate your public service pension scheme adjustment service, and not through your Self Assessment tax return.
If you have additional charges, you can either:
- ask your scheme to pay
- pay the charge yourself
If you want your scheme provider to be jointly liable for the charge, this must be done by:
- 6 July 2025 if you were an active or deferred member on 1 October 2023
- 6 July 2027 if you were a pensioner on 1 October 2023
If you do not ask for this to be done by the deadline, you can still ask your scheme to pay, but they will not be jointly liable, meaning you may be liable for any additional charges or penalties.
Reporting annual allowance charges for the 2022 to 2023 tax year
As a result of the remedy, pension schemes have more time than they would usually have to issue pension saving statements. This means you will miss the filing deadline on your self-assessment for reporting any tax for the 2022 to 2023 tax year.
You should report any annual allowance charges incurred for the 2022 to 2023 tax year through the Calculate your public service pension scheme adjustment service, and not through your Self Assessment tax return. When inputting your figures for the tax year 2022 to 2023, where it asks what amount was paid originally, you can enter a zero amount in these.
If you choose to pay the charge yourself, we will issue an assessment which will set out how you can pay. If you want your scheme to pay, we will ask for details of the scheme and when you will be asking them to pay. This should be done no later than:
- 6 July 2025 if you were an active or deferred member on 1 October 2023
- 6 July 2027 if you were a pensioner on 1 October 2023
If you do not ask for this to be done by the deadline, you can still ask your scheme to pay, but they will not be jointly liable. This means you may be liable for any additional charges or penalties.
Getting a refund
You or your scheme administrator will be due a refund if a previous annual allowance tax charge that was paid has decreased as a result of the remedy. You can make a submission for a refund through the Calculate your public service pension adjustment service. How the refund is made will depend on who paid the original charge.
If the decrease in the charge was between 6 April 2019 and 5 April 2023 and:
- you paid the original charge, HMRC will refund you directly
- your scheme paid the original charge, they will contact HMRC for a refund
If the decrease in the charge was between 6 April 2015 and 5 April 2019 and:
- you paid the original charge, your scheme will contact you to arrange a refund
- your scheme paid the original charge, they will usually use the compensation to increase your pension benefits
If you asked a private sector pension scheme to pay the original charge, you will need to contact the scheme to discuss this.
Extended time limits and deadlines
The time limits have been extended where tax charges have occurred as a result of the remedy, between 6 April 2019 and 5 April 2023.
Where there are changes to liability to these tax charges, the remedy makes retrospective changes to these. You will be able to use the Calculate your public pension adjustment service to:
- work out changes to your annual allowance charges
- report changes to annual allowance charges
If you are impacted by the remedy, you must report charges, or changes to previous charges by 31 January 2025 if you are a member of a:
- Chapter 1 scheme who, before 1 October 2023, had not started to take a pension, or if you’re a beneficiary of a deceased member who had not died before this date
- Chapter 2 scheme
- Chapter 3 scheme
You must report any charges or changes to previous charges by 31 January 2027 if you are affected by the remedy and you were a pensioner or the beneficiary of a person who had died before 1 October 2023.
If you are more than one type of member, such as active in one scheme and pensioner in another, you have until the later of the dates to report charges, or changes to previous charges, to HMRC.
Overpaid tax originally paid by the scheme member
If you are impacted by the remedy, you must report charges, or changes to previous charges by 31 January 2029 if you are a member of a:
- Chapter 1 scheme who, before 1 October 2023, had not started to take a pension, or if you’re a beneficiary of a deceased member who had not died before this date
- Chapter 2 scheme
- Chapter 3 scheme
You must report any charges or changes to previous charges by 31 January 2031 if you are affected by the remedy and you were a pensioner or the beneficiary of a person who had died before 1 October 2023.
Repayment interest
If, as a result of the remedy, you have a decrease in annual allowance between 6 April 2019 and 5 April 2023, HMRC will work out repayment interest based on the tax year which the charges relate to.
If you have a decrease for a charge you have previously paid in one or more tax years, but an increase in one or more other tax years, where you have let us know that you will be paying the same charge type, we will work out the amount of repayment interest before offsetting the differences.
Last updated 17 November 2023 + show all updates
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The section 'Check if you have new or additional tax charges between the 2019 to 2020 and 2021 to 2022 tax years' has been updated to show the correct dates.
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First published.