Answers · UK 2025/26

What is the McCloud remedy and how does it affect my pension?

The McCloud remedy corrects unlawful age discrimination in the 2015 public sector pension reforms. Members who were in service before 1 April 2012 and continued after 31 March 2015 receive a "Deferred Choice Underpin" -- at retirement they choose the better of their legacy final-salary or 2015 career-average pension for the period 1 April 2015 to 31 March 2022. Annual allowance charges for remedy years may need retrospective correction.

Last updated: 10 June 2026Last reviewed: 10 June 2026How we verify

Full answer

In December 2018, the Court of Appeal ruled in McCloud/Sargeant that the transitional protections offered to older public sector workers when pensions moved to career average in 2015 constituted unlawful age discrimination. Older workers (those within 10 years of normal pension age in 2012) were allowed to stay in their legacy final salary schemes until their protected pension age. Younger workers were moved to the new career average schemes immediately in 2015. The court ruled this differential treatment unlawful. The remedy: all affected members -- defined as those who were in the relevant public sector scheme (NHS, Teachers, Civil Service, LGPS, Firefighters, Police, Judiciary, Armed Forces) before 1 April 2012 and who remained in service after 31 March 2015 -- receive what is called a "Deferred Choice Underpin" (DCU) or, in the NHS, the 2015 Remedy. At retirement, the scheme will calculate both the legacy final-salary pension entitlement and the 2015 career-average entitlement for the "remedy period" of 1 April 2015 to 31 March 2022. Members then choose (or the scheme automatically provides) whichever is higher. The annual allowance implications are significant. For many members, the remedy period recalculation changes the pension input amounts for each of the seven remedy years (2015/16 to 2021/22), which in turn alters whether an annual allowance charge arose in those years. HMRC has provided amended pension savings statements for affected members, and it may be necessary to amend Self Assessment returns and reclaim or repay tax. Pension schemes (NHS, TPS, etc.) are working through remediation -- members should check correspondence from their scheme administrator. Those who paid Scheme Pays elections for annual allowance charges in remedy years may also need amendments. Professional advice is recommended for anyone materially affected, given the complexity of the calculations.