For many NHS employees, MARS can be a genuine opportunity to leave on better terms than an ordinary resignation. However, it can also carry legal, tax, and pension risks if accepted without properly understanding the terms, particularly where a settlement agreement is involved.

What is the NHS MARS scheme?

MARS stands for Mutually Agreed Resignation Scheme. It is a voluntary exit mechanism used by NHS organisations to reduce workforce costs without proceeding to compulsory redundancy.

Under MARS, the employee agrees to resign, and the employer may offer a discretionary compensation payment. This is often linked to salary and length of service, but the detail depends on the Trust’s local policy and the individual circumstances.

MARS is not redundancy and does not carry the same statutory rights or pension protections. It is also different from resigning without any package. In many cases, though not all, a MARS exit is documented through a settlement agreement. This is particularly common where the employer is making a non-contractual payment and wants certainty that no legal claims will be brought later.

Is the NHS MARS scheme worth it?

Whether MARS is worth accepting depends on the overall package and its wider consequences. The value of a MARS offer will vary depending on factors such as your role, length of service, pension position, future job prospects and the legal rights you are being asked to give up. For some employees, it offers a clean and managed exit, a lump-sum payment and an agreed reference. For others, the payment may be modest, the pension impact unfavourable, or the legal terms more restrictive than expected.

Advantages of the NHS MARS scheme

One of the main attractions of MARS is that it can provide compensation where resignation alone would usually result in nothing. It can also offer a structured exit, with a clear leaving date and, in many cases, agreed reference wording.

For employees who are already considering leaving the NHS, MARS can reduce uncertainty and avoid a drawn-out period of organisational change. It may also allow an earlier departure than waiting for a redundancy process that may never arise.

Disadvantages and legal risks of NHS MARS

The most significant risk is that MARS is often linked to a settlement agreement. By signing one, an employee usually agrees to waive a wide range of potential legal claims, including claims they may not have realised they had at the time, such as discrimination or whistleblowing-related claims.

Although some rights cannot be waived, including accrued pension rights and unknown personal injury claims, the scope of the waiver is still substantial and should be understood before anything is signed.

Negotiation is another area where misunderstandings commonly arise. MARS is discretionary, and there is no entitlement to negotiate the terms. Some NHS organisations will not negotiate the compensation amount once it has been approved. Others may be prepared to discuss limited issues, such as the leaving date, reference wording, a contribution towards legal fees, or minor drafting points. Employees should not assume that a MARS offer can always be improved, but equally should not assume it is automatically fixed.

Care is also needed around restrictive terms in the agreement. These can include broad confidentiality clauses, non-disparagement wording, or provisions that affect future NHS employment, such as repayment or re-employment restrictions.

NHS MARS vs voluntary redundancy

A common question is whether MARS is a better option than voluntary redundancy. The answer will depend on the individual circumstances.

Where voluntary redundancy is available, it is usually tied to statutory or contractual redundancy terms and may provide clearer legal and pension protections. MARS can offer a quicker and more flexible exit, but the payment may be lower and the legal waivers broader.

Anyone deciding between MARS and voluntary redundancy should compare the net financial outcome, the pension implications and the legal terms being offered.

For more information please contact us on 01524 907100, info@pre-law.co.uk or through our online enquiry form