LONDON: Doctors have welcomed a “short-term” NHS pensions fix, which aims to stop senior medics giving up shifts due to the threat of heavy tax bills.
Doctors’ leaders and unions have been arguing that the NHS’s most senior and experienced staff are being pushed to leave, work part-time or refuse extra shifts due to punitive tax rules. NHS pensions changes introduced in 2016 have affected doctors earning more than £110,000 a year due to the introduction of a tapered annual allowance.
This is a taxation threshold which restricts the amount of pension growth individuals are allowed each year before tax charges apply. A tapered annual allowance means that for every £2 of income above £150,000 a year, around £1 of annual allowance is lost.
However, NHS chief executive Simon Stevens has written to doctors’ leaders spelling out how clinicians can opt to pay any tax bill caused by the pensions cap from their pension pot without having to find the funds upfront. The NHS is then committed to making up the difference in annual payments when they retire.
Professor Andrew Goddard, president of the Royal College of Physicians, said: “This is fantastic news and means that clinicians can finally deliver the best patient care without having to worry about the impact of punitive pension taxes.
“We know that NHS England have worked hard to resolve a problem not of their own making. It is a much needed in-year short-term fix. The gauntlet has now been thrown down to whoever wins the General Election, to find a long-term solution that will ensure those in the later stages of their medical careers know that they are valued.”
Dr Chaand Nagpaul, chairman of the British Medical Association (BMA), said: “We remain strong in our view that the definitive solution is for a new government to scrap the annual allowance in defined benefit pension schemes as soon as possible.”
He said time was needed to work through the new proposals, adding: “Patients are already facing severe delays in receiving routine and emergency care and staff are working under ever-increasing pressure. “It’s more important than ever that a new government agrees a comprehensive solution for taxation reform - preferably on December 13 - that works for all affected healthcare staff, including armed forces medical staff, GPs and others in primary and community care.”
A YouGov survey commissioned by the Royal College of Surgeons earlier this year found that 68% of consultant surgeons in England were considering early retirement because of the pensions tax situation.
Some 64 per cent had been advised to work fewer hours in the NHS to avoid crippling tax bills, while 69% had reduced the amount of time they have spent working in the NHS as a direct result of pension rules.
One surgeon described the situation as a “much greater” threat to the NHS than Brexit, while others told how waiting lists were spiralling due to staff refusing shifts.