Written statement on the NHS Pension Scheme

Written statement on the NHS Pension Scheme by Karin Smyth, Minister of State for Health

Over the past year, I have made regular statements about the implementation of the McCloud remedy in the NHS Pension Scheme. This hugely complex undertaking across the public sector pension schemes is required to address age discriminatory policy legislated for by the Coalition Government in 2013.

The NHS Pension Scheme is administered on behalf of the Department by the NHS Business Services Authority (NHSBSA). In 2025, the NHSBSA failed to meet its McCloud delivery deadlines. In response, in July 2025, I commissioned Lisa Tennant in her capacity as the Chair of the NHS Pensions Board to carry out an independent review of the NHSBSA's delivery of the McCloud remedy. The report from this review has been published today on GOV.UK. Copies have been placed in the Library of the House.

The review was an extensive and forensic undertaking. It has identified and made recommendations across two broad categories of findings:

• Strategic factors: including governance, leadership, organisational culture and systemic issues
• Operational factors: including the operating model, operational readiness, digital and data, customer experience and change management.

Lisa Tennant's final report makes clear that further action is required to put the NHS pension scheme on a secure footing and to prepare it for long-overdue modernisation.

Since July 2025, I have regularly met Lisa to hear her emerging findings and I have increased the Department's oversight and support for the NHS pension scheme:

• NHSBSA is now required to provide much more frequent and detailed reporting of scheme performance to the Department;
• I have ensured that McCloud planning and delivery resources were increased;
• I have visited the NHSBSA's headquarters in Newcastle to see firsthand their work to strengthen delivery arrangements at the NHS Pension Scheme.

The NHSBSA has also acted. A dedicated new leadership team for the NHS Pension Scheme has been created. When the McCloud planning was largely complete, the NHSBSA team started to reassess in June how the pension scheme's rules were being applied. They reported to the Department at the end of July that there were issues in the administration of a small proportion of members records, with the earliest dating back to 2008. Most of these issues built up between 2014 and today, and in a small number of cases, I regret to say that some are ongoing. As a result, while the vast majority of members are receiving the correct pension amount, some will have been entitled to more.

To establish with absolute certainty that all the affected members have been properly identified, I have this week appointed the Government Actuary's Department to lead a comprehensive audit of the scheme's administration. I will report back to the House on the audit's progress and findings. A new Departmental Board has been established with external and independent expertise to oversee the NHSBSA's implementation of the audit's findings and its wider pensions operations. This Board will meet regularly from next week, reporting to me.

Based on what we know today, around 95% of members will be unaffected. Many of those who are will already be retired and receiving a pension. The NHSBSA will continue to pay pensions promptly and reliably and to process retirement applications.

Each member who is directly affected will be contacted personally by the NHSBSA and I will make sure that this happens as quickly as possible. No action is needed by anyone who is a member of the NHS pension, whether working or retired. NHSBSA will ensure that information for members is available on their website and is updated regularly. Records will be corrected and where appropriate, pension awards updated. Where payments or increases are due, interest will be payable.

There has rightly been much scrutiny of progress in delivering the McCloud remedy which resulted from poor decision making by previous Governments. McCloud implementation introduced significant additional pressure on the administration of the NHS pension scheme which was already strained due to growth in scheme membership numbers, complexities in scheme design and an outdated technology infrastructure.

In light of the new issues that have been uncovered, I have directed the NHSBSA to re-assess the deliverability of its McCloud plans.

I will continue to hold the Authority to account for the delivery of the NHS Pensions Scheme and to provide regular updates to the House, setting new statutory deadlines for McCloud when I can do so with confidence.

I am making this statement today because I want to be transparent about these concerning issues at the NHS Pension Scheme and to confirm this Government's commitment to addressing them in full. I will shortly visit the NHSBSA and will make clear that if progress is not made at sufficient pace, I will consider what further action is required. I will keep the House updated on progress.