Doctors could start working part-time over pension rules, warns BMA

25 Apr 19

Extra pressure could be placed on the NHS as doctors reduce their workloads because of tax charged on pension contributions, according to the British Medical Association.

Consultants have already started to reduce their workload, retire and not take on leadership positions to avoid high tax on pension savings, the trade association for doctors and medical students in the UK has warned in a letter to chancellor Philip Hammond, released today.

Doctors are likely to start working part-time as pension rules limiting the amount staff can save into a pension each year before tax charges apply have landed some consultants with high bills, the BMA said. They are also “paradoxically” more likely to end up with higher pensions by working part-time, the association added. 

“We strongly urge you to take urgent action and work with us to correct these iniquities. Unless such action is taken, doctors will be left with no option but to reduce their working hours even further, thereby exacerbating an already acute workforce crisis and seriously jeopardising the sustainability of the NHS,” the letter stated.

Signed by Dr Gary Wannan, acting chair of BMA consultants committee, the letter added: “Astonishingly, as a result of these annual allowance tax charges, it may also make financial sense for consultants to consider working part-time.”

The allowance is the maximum amount you can have in retirement savings before tax is paid. For 2019-20, the allowance is £1,055,000. It rises each year with inflation. The BMA said that with defined benefit schemes, such as the NHS pension scheme, this means “four-, five- and six-figure charges in addition to PAYE and other tax charges".

It added that “regular annual allowance charges have now become a problem that will affect all full-time consultants”.

The BMA calls on government departments including the Treasury, HMRC and Department of Health & Social Care to take action to reverse the “truly shocking perfect storm” the allowance has created.

The allowance was introduced in April 2006 to prevent wealthy people benefiting from the pension tax relief system. It was initially £1.5m, going up to £1.8m between 2010 to 2012, but then started dropping – to £1m between 2016 and 2018, and £1.03m in 2018-19.

The association noted it had written to Hammond “several times” since August last year and said it feared the Treasury did not “fully appreciate” the risks posed by the rules to the sustainability of the NHS.

Separately, the BMA also released a survey today showing that eight out of 10 doctors were at ‘substantial risk’ of burnout because of pressure and unsustainable workloads.  

Of the 4,300 respondents – including 1,400 medical students – carried out in October last year, 62% said they were using alcohol, drugs or self-medication to cope with the stress.

BMA president Dinesh Bhugra said: “Medical students are surprisingly stressed, which is a bad sign, as these are some of the most energetic, enthusiastic people, who want to help people by going into medicine.”

Bhugra called for more support for medical students and research to pinpoint any geographical differences in stress levels.

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