Senior doctors in the NHS are better off working part-time under new pension rules, the British Medical Association has warned.
In a letter to the Chancellor, Philip Hammond, the BMA has highlighted that an increasing number of doctors and other NHS workers are encountering “serious difficulties” with annual and lifetime tax allowances.
The letter states that the BMA’s consultants committee has modelled the impact of the current tax regime on employees in NHS pension schemes.
“The results of this modelling are truly shocking; it transpires that separate changes made to the Annual Allowance and the NHS pension scheme have converged, creating a ‘perfect storm’ that is essentially forcing the most experienced doctors to retire, reduce their workload, abandon leadership positions and stop covering vacancies,” it reads.
Unless urgent action is taken, the BMA warns that doctors will be left with no option but to reduce their working hours, seriously jeopardising the sustainability of the NHS.
Calculations by the doctors’ union show that a senior doctor working a 3.5 day week could receive an annual pension of £65,000. If they worked a five-day week, their pension would be just £55,000.
Speaking on the BBC’s Today programme this morning, the health secretary, Matt Hancock, said: “Of course, I accept the analysis behind this critique. This is an unintended consequence of a different pension tax change that was made a couple of years ago and it’s something I am talking to the Treasury about.”
Danny Mortimer, chief executive of NHS Employers, said: “The health service is suffering from a severe workforce shortage, and any suggestion that skilled senior clinicians are looking to reduce or end their NHS commitments should be cause for alarm.
“There is mounting concern about the impact of pensions tax allowances, and especially the tapered annual allowance for higher earners.”
A Treasury spokesperson said: “We want people to save into a pension, which is why we allow the majority of savers to make contributions tax-free.
“And doctors, like all NHS staff, benefit from one of the best available defined benefit occupational pensions schemes. But we do have to get the balance right between encouraging saving and managing government finances, which is why we restrict the tax relief available for the highest earners.
“We are aware of concerns raised by NHS staff and the Treasury is discussing the issue with the Department of Health and Social Care.”
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