Pension rules that have meant some doctors working less are to be changed under a consultation launched today by the government, but the British Medical Association has criticised the proposals saying they are ‘too little, too late’.
The BMA criticised pension arrangements in 2019, when Matt Hancock was health secretary, saying it was in senior doctors’ best interests to work part time. In a letter to the government the doctors’ union highlighted that a senior doctor working a 3.5-day week could receive an annual pension of £65,000, whereas working a five-day week would result in a pension of just £55,000.
Health and social care secretary Steve Barclay has now proposed NHS pension changes that aim to help retain experienced NHS clinicians and remove the barriers to staff returning from retirement. The proposals include introducing flexibility to allow retired and partially retired staff to return to work, or increase their working hours, without having payments to their pension reduced or suspended. This will allow NHS staff to claim a portion or all their pension benefits but continue to work and contribute to their pension.
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The Department for Health and Social Care has said the proposals will also fix unintended impacts of inflation, such that senior clinicians are not taxed more than is necessary, enabling experienced staff to continue to contribute to the NHS up to and beyond retirement age.
Barclay said: “The generous NHS Pension Scheme is one of the best in the country, but it’s not working as it should for everyone. We need a system where our most experienced clinicians don’t feel they have to reduce their workload or take early retirement because of financial worries. I also want to make it easier for staff that want to return to work to support the NHS to be able to do so without penalties.
“These proposed changes will help open up extra appointments so patients can see their GP and consultants more quickly. With record numbers of doctors and nurses working in the NHS alongside record funding, I’m focused on giving people the security of knowing the NHS will be there for them when they need it.”
The consultation will be open for eight weeks and reforms are expected to be implemented in late spring 2023. Major reforms being proposed include:
- A new partial retirement option to support older staff who want to work more flexibly and enable them to access part of their pension while continuing to contribute to their pension pot, allowing staff to partially retire, claiming all or a portion of their pension but continue working and building more pension benefits. This would also apply to retired staff returning to the workforce;
- Removing limits on hours recently retired staff can work giving them control over the hours they work in the first calendar month after returning. This is a barrier for retired staff considering returning to the NHS which will be removed, helping increase capacity;
- Allowing retired staff to re-join the pension scheme making returning to work in the NHS more attractive by ensuring senior clinicians and NHS staff can continue to contribute to their pensions;
- Fixing the interaction between the pension tax system and inflation to ensure senior clinicians have more headroom against the £40,000 pension tax annual allowance. This means senior doctors are either less likely to receive a tax charge, or will receive a smaller tax charge, reducing the likelihood of early retirement; and
- Allowing staff working in Primary Care Networks, such as GPs and general practice staff, to access the NHS Pension Scheme. Previously they have had to apply for time-limited access on an ad-hoc basis. These proposals will mean they can potentially benefit.
Dr Vishal Sharma, chair of the BMA pensions committee, said: “We need to consider the detail within the consultation but on the face of it, these proposed changes appear to be too little, too late. Although they implement some of the immediate mitigations that the BMA has been calling for, they fall well short of the long-term solution that the NHS desperately needs.
He added that under the NHS pension changes, doctors would continue to incur “sky-high” tax bills, which is devastating for morale. A recent BMA survey suggested that some 40% of consultants plan to leave the NHS in some capacity over the next year and that the situation is just as stark for GPs and other senior doctors.
Sharma said: “The partial retirement option and greater flexibility for recently retired doctors returning to the workforce have potential benefits and in particular will standardise retire and return arrangements – something the BMA has lobbied for. However, this does not directly address the issues caused by the annual or lifetime allowance. These are not just issues for doctors nearing retirement, but they are also increasingly influencing the decisions of mid-career consultants and GPs, for whom partial retirement would not be an option.
“These doctors will still have to consider reducing the work they do to prevent incurring large punitive tax bills and it is disingenuous of the government to suggest that this will make any meaningful difference to the huge backlogs in care we are seeing.”
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The BMA reiterated calls for the establishment of a tax unregistered scheme for senior NHS staff, similar to one created for judges.
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