If you are an NHS employee who has been offered a settlement agreement as part of a voluntary redundancy scheme, a Mutually Agreed Resignation Scheme (MARS), or any other exit arrangement, our experienced settlement agreement solicitors can provide the independent legal advice you need before you sign.
We regularly advise employees of NHS England (NHSE), Integrated Care Boards (ICBs) and Commissioning Support Units (CSUs) who are considering voluntary redundancy or a MARS NHS exit. We understand the specific terms, processes and pressures involved in NHS settlement agreements and can provide clear, practical advice tailored to your circumstances.
In most cases, your employer’s legal fee contribution (usually £500 + VAT) will fully cover the cost of our advice — so there is nothing for you to pay.
Call us on 01270 215117 or make an enquiry online to arrange your consultation.
Common questions from NHS employees:
NHS restructuring programmes affect a wide range of staff, from administrative and support roles to clinical professionals, managers and senior leaders. We advise NHS employees at all levels, including those employed by:
Whether you have been offered a voluntary redundancy package, invited to apply under a MARS, or are leaving the NHS through any other agreed exit, we can help.
Senior NHS employee, consultant, or board member? We also advise on more complex negotiated exits involving higher-value packages, share of on-call commitments, clinical excellence awards or board-level considerations. Read our senior settlement agreement guidance →
There are several ways in which NHS employers may offer staff the opportunity to leave during periods of organisational change. It is important to understand which type of scheme applies to you, as the terms, payments and implications can be very different.
Voluntary redundancy in the NHS is typically governed by Section 16 of the NHS Terms and Conditions of Service Handbook (Agenda for Change). If you qualify, your redundancy payment is calculated based on your length of reckonable service, age and weekly pay. Enhanced redundancy terms may apply, and payments can be significant for long-serving staff — potentially up to 24 months’ salary in some cases.
A settlement agreement is often used alongside voluntary redundancy to confirm the terms of your exit and to record that you accept the payment in full and final settlement of any employment claims.
A MARS is not the same as redundancy. It is a voluntary severance arrangement, governed by Section 20 of the NHS Terms and Conditions of Service Handbook, under which employees are invited to resign in return for a one-off severance payment. MARS payments are usually less generous than voluntary redundancy payments and do not include notice pay.
If you are accepted under a MARS, you will usually be required to sign a settlement agreement before receiving your severance payment. There may also be restrictions on re-joining the NHS within a specified period, and you could be required to repay some or all of the severance payment if you return to NHS employment before a certain date.
Understanding the difference between voluntary redundancy and MARS is essential. If you are unsure which scheme applies to you, or whether the offer you have received is fair, the section below explains how MARS payments are calculated, and our solicitors can check your own figures with you.
If you have been offered a payment under a Mutually Agreed Resignation Scheme, you can sense-check it quickly. Most NHS MARS schemes pay to the national scale: 3 months’ basic salary if you have 1 to 6 complete years of reckonable service (your continuous NHS employment, including time with previous NHS employers), rising by half a month’s salary for each further complete year, up to a maximum of 12 months’ salary at 24 years.
You can change your mind at any time up to the moment you sign. Your deadline to respond comes from your employer’s own scheme document, so check carefully the date on your offer letter. Nothing is fixed until you sign the settlement agreement but it is vital you comply with any deadlines given.
MARS is not redundancy, and the payment is calculated differently (and for most people, is less favourable). If you have reckonable service of 24 years or more then it is far less favourable: under the MARS scheme the maximum payment is capped at 12 months’ pay (and a maximum of £80,000), whereas under the NHS compulsory redundancy scheme it is 24 months’ pay (and a maximum of £160,000).
Local MARS schemes are approved against the payment scale of the previous national scheme, and most follow it; a scheme wanting to pay a different rate needs additional approval. Your employer’s own scheme document is the table to check against. The national scale:
| Complete years of reckonable service | Payment |
|---|---|
| 1 to 6 | 3 months’ basic salary |
| 7 | 3.5 months |
| 8 | 4 months |
| 9 | 4.5 months |
| 10 | 5 months |
| 12 | 6 months |
| 14 | 7 months |
| 16 | 8 months |
| 18 | 9 months |
| 20 | 10 months |
| 22 | 11 months |
| 24 or more | 12 months (the maximum) |
Example. With 14 complete years of reckonable service, you receive 3 months’ salary for your first 6 years plus half a month for each of the next 8 years: 7 months’ basic salary in total.
Two crucial caps apply: No MARS payment for an individual can be more than £80,000. And for staff with total earnings over £80,000, the salary used in the calculation is capped at £80,000 (pro rata for part-time staff).
Check the two figures behind the sums as well. Basic salary means your basic pay only – it does not include enhancements, overtime or on-call payments. Reckonable service must have no break of 12 months or more, and service already counted for a previous NHS redundancy or loss-of-office payment does not count again.
Ask your employer’s HR team for two things in writing: the scheme document with its payment table, and the calculation showing the reckonable service and basic salary they used. Check the service start date and whether time with previous NHS employers has been included. A miscalculation is not the same as a refusal: there is no appeal if your employer declines your MARS application, but a figure that does not follow the scheme’s own table can be queried before you sign. We check the calculation against your scheme document as part of our advice meeting.
MARS schemes are always time-limited, and the application window is set when the scheme launches. For NHS foundation trusts, the approval conditions cap a scheme at three months. The closing date for your scheme will be clearly set out in the scheme document.
You apply while the window is open, and your employer decides whether to accept your application. It is under no obligation to accept, and there is no right of appeal if it refuses. If you are accepted, you will be issued with a settlement agreement, and you must take independent legal advice before signing. Your leaving date is then agreed between you and your employer within the scheme’s timeframe. You can withdraw at any point up to the moment you sign.
Usually the first £30,000 is. A genuine MARS severance payment is normally free of income tax up to £30,000, and anything above that is taxable. MARS payments do not include notice pay. If you leave before working your notice in full, some or all of your payment can be taxed as notice pay instead, with both income tax and National Insurance deducted, rather than benefiting from the £30,000 exemption. This is due to the ‘Post-Employment Notice Pay’ rules. Your settlement agreement should set out exactly which parts of your payment are taxable and we will cover this in our advice meeting.
In most cases, your employer pays. The most common contribution we see is £500 + VAT, which matches our current minimum fee for our Head of Department Camille Renaudon to advise on a settlement agreement, covering our preparation and your first meeting (usually around 60 to 75 minutes). Some MARS schemes do offer less though, and some only contribute up to a maximum of £400 including VAT towards legal costs. Where that leaves a shortfall against our minimum fee, we would invoice you for the difference and will confirm the position with you before we undertake any work.
Our minimum costs depend on the experience of the solicitor who is advising you:
*Our minimum charges include our preparation for (including the consideration of documents that we need from you such as your contract of employment, a payslip, plus the settlement agreement and any covering letter/email) and attending upon you in a detailed advice appointment which is typically 60-75 minutes long.
If your employer contributes £400 including VAT, that covers Joel’s minimum fee in full.
If the settlement agreement requires advice upon a reaffirmation (this means that the employee and their legal adviser need to re-sign the settlement agreement once we reach their termination date), then our costs are slightly higher to include the additional work, typically £750 + VAT for Camille and £500 + VAT for Joel. It is unusual in our experience for this to be required under a MARS scheme.
Instructing us to advise you on the offer, asking us to check your figures, or asking your employer to correct a calculation, does not commit you to signing a settlement agreement.
If you decide not to sign the agreement though, bear in mind that your employer will not make any contribution to legal costs and you would be invoiced for the work carried out by us.
Whether the money is right is only half the decision. Before you accept, read the sections below on re-employment restrictions, clawback and the effect on your NHS Pension.
This section is general information, not legal advice. Your employer’s scheme document is the definitive version of the terms that apply to you. For advice on your own offer, please speak to our Employment team.
When you instruct Hibberts to advise you on your NHS settlement agreement, we will:
If we consider that the terms of your agreement could be improved, or if something does not look right, we will discuss your options with you clearly and without pressure.
Settlement agreements offered by NHS employers can involve specific terms and requirements that are different from those in the private sector. Our solicitors are experienced in advising on these, including:
Leaving NHS employment can have a direct impact on your pension, depending on which section of the NHS Pension Scheme you belong to and your length of service. It is important to understand whether your exit will affect your pension benefits, and whether early retirement provisions or pension protections may apply. We will advise you to seek a pension forecast if one has not already been provided by your employer.
Many NHS settlement agreements, particularly under MARS, include clauses that restrict you from returning to NHS employment for a set period. If you do return within that period, you may be required to repay part or all of your severance payment. Our solicitors will explain exactly what restrictions apply and what triggers a repayment obligation.
If your employment is governed by Agenda for Change terms and conditions, the calculation of your redundancy or severance payment should follow the formulas set out in the NHS Terms and Conditions of Service Handbook. We will check that your payment has been calculated correctly and that your reckonable service has been properly assessed.
NHS Employers’ guidance is clear that settlement agreements cannot be used to prevent staff from making protected disclosures or speaking up about patient safety concerns. The NHS Standard Contract requires all settlement agreements to include an express carve-out clause confirming your rights under the Public Interest Disclosure Act 1998. We will ensure that your agreement contains this protection and that no confidentiality clause goes further than it should.
NHS employers may need HM Treasury approval for special severance payments. While this is primarily a matter for your employer, it can affect timescales and the structure of your settlement. Our solicitors understand how this process works and will advise you if it is relevant to your situation.
When you are offered an NHS settlement agreement, your employer is required to allow you to obtain independent legal advice and will almost always contribute towards the cost. The standard contribution in NHS settlement agreements is £500 plus VAT, which in most cases fully covers the cost of our advice.
This means there is usually nothing for you to pay. We will confirm the position on fees with you before we begin any work, and if there were to be any additional costs, we would always discuss this with you first.
For more detail on who pays and how much, see our guide to settlement agreement solicitor fees
Some NHS employers suggest a particular solicitor or law firm to provide your independent legal advice. While this can be convenient, you are under no obligation to use the firm your employer recommends. You have the right to instruct any qualified solicitor of your choosing.
Choosing your own solicitor means you can be confident that the advice you receive is truly independent and focused entirely on your interests.
The majority of our NHS settlement agreement consultations are carried out remotely via Microsoft Teams. This means we can advise you wherever you are in the country, at a time that suits you, without the need to travel to one of our offices.
If you would prefer to meet in person, we have offices in Crewe, Nantwich, Tarporley and Whitchurch.
If you have been offered a settlement agreement by an NHS employer — whether as part of a voluntary redundancy, MARS or any other exit arrangement — contact us for prompt, independent legal advice.
Call us or complete our enquiry form and a member of our employment team will be in touch, usually within the same working day.
No. You have the right to choose your own independent solicitor. While your employer may suggest a particular firm, you are not required to use them. Instructing your own solicitor ensures your advice is fully independent.
In most cases, no. Your employer will make a contribution towards your legal fees, typically £500 plus VAT, which usually covers the full cost of our advice. If your matter requires work beyond the standard consultation, we will always discuss any additional costs with you first.
Voluntary redundancy is a form of dismissal by reason of redundancy, typically governed by Section 16 of the Agenda for Change handbook, and usually attracts a payment calculated by reference to your service and salary. A MARS (Mutually Agreed Resignation Scheme) is a voluntary resignation scheme, governed by Section 20, under which you agree to resign in return for a severance payment. MARS payments are generally less generous than redundancy payments and do not usually include notice pay. The two are legally distinct, and it is important to know which applies to you.
In many cases, yes. A genuine termination payment may be exempt from income tax up to £30,000 under current legislation. However, not all elements of your payment will qualify. Contractual notice pay, payment in lieu of notice (PILON) and certain other payments are taxable. Your settlement agreement should clearly identify which payments are taxable and which are not. We will explain the tax position as part of our advice.
This depends on the terms of your agreement. Many NHS settlement agreements, particularly under MARS, include restrictions on re-joining the NHS within a specified period — often six months or longer. If you return before the restriction period ends, you may be required to repay part or all of your severance payment. We will explain any re-employment restrictions and clawback provisions during your consultation.
We can usually arrange a consultation within 1 to 2 working days. Most appointments are carried out remotely via Microsoft Teams, so there is no need to wait for an in-person meeting. If you have an urgent deadline, please let us know and we will do our best to accommodate you.
Our solicitors will review the financial terms of your settlement agreement and check that any redundancy or severance payment has been calculated correctly in accordance with the NHS Terms and Conditions of Service Handbook. If we identify an issue with the calculation, we will raise it with you and discuss your options.
Leaving NHS employment can affect your pension depending on your age, length of service and which section of the NHS Pension Scheme you belong to. We will advise you to obtain a pension forecast if you have not already done so and will explain how your exit may affect your pension position. For detailed pension advice, we may recommend that you also seek specialist pension guidance.
Yes. A settlement agreement normally ends your employment and settles any claims; it does not stop you taking a new job. Before you start a new role, check three things in your agreement and your existing contract:
This is general information only. Please seek independent legal advice on the terms of your own agreement.
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