Plan to end the tax trap on NHS senior doctors’ pensions
This is an interesting development in the context of the increasing challenge of recruiting GPs in rural areas. The article tells us:
They are considering changing the NHS pensions scheme so that staff can make only half their usual pensions contributions for up to 10 years during their careers. It is known as a “50/50” pension because healthcare personnel pay only half the usual amounts for a set period, but then receive commensurately less money when they start drawing their pension in retirement.
Already used in local government, it is designed to stop the current situation that means medics in the late stage of their careers are being hit with big tax charges for exceeding their pension allowance limits, especially if they do extra work.
Some of the service’s most experienced doctors are reducing their hours, refusing to plug rota gaps or quitting earlier than intended to avoid effectively being charged more than 100% tax on some of their earnings.
The disclosure comes days before NHS bosses are set to publish a long-awaited strategy to tackle the worsening shortages of doctors, nurses and other professionals. Figures show the service in England alone is short of 9,100 doctors and 40,000 nurses.
“Philip Hammond and Matt Hancock seem to agree that this is a good change to make. It would help the NHS stop haemorrhaging experienced doctors because of the existing pension rules,” said one senior NHS figure who has been made aware of the ministerial discussions.