Government changes pension proposals to stop doctors cutting hours

7 Aug 19

Proposals aimed at ending an ongoing NHS pensions row have been overhauled less than three weeks after they were announced. 

Doctors in England and Wales have been cutting hours, refusing promotions and retiring early due to rules implemented in 2016, which reduced the amount high earners can save into their pensions tax-free.

A consultation on NHS pensions announced on 22 July sought to provide “more flexibility” for doctors but came under fire from the sector for not going far enough.  

The pension issue has seen nearly half of GPs reducing their hours and has contributed to growing waiting lists

New proposals in the consultation will offer “full flexibility” for doctors to lower their pension contributions to avoid crossing the point at which they must pay tax. 

The annual allowance for tax-free pensions contributions in the NHS is £40,000 but has fallen from £255,000 in 2010-11. 

Health secretary Matt Hancock said: “We are taking immediate action and I hope these flexibilities will encourage our top NHS staff to fulfil the dedication of their mission: to care for their fellow citizens in time of need.” 

Chris Hopson, chief executive of NHS Providers, said: “These proposals are helpful next steps. But we won’t enable key staff to work the extra hours needed and put off ideas of early retirement until we have a clear, definitive, solution fully in place. So we have to move fast,” he said. 

Siva Anandaciva, chief analyst at the King’s Fund think-tank, was concerned the consultation did not include more levels of the NHS workforce

Anandaciva said: “The government’s proposed changes to pension will help to retain some senior clinicians, but it appears that health service managers have been left out of the plans, despite high vacancy rates in board roles such as director of operations, finance and strategy - something the pensions issue will only exacerbate.” 

The consultation will run for 12 weeks and be opened “very soon”, according to a spokesperson for the Department of Health and Social Care. Changes are expected to be in place ready for the new tax year. 

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