Health Policy

11.09.19

NHS pension overhaul announced to help tackle workforce challenges

Ministers from the Department of Health and Social Care (DHSC) have announced a major overhaul of the NHS pension scheme, in efforts to prevent doctors cutting their hours in order to avoid tax penalties.

Following recent changes, senior clinicians had seen sizeable potential tax hits for working additional hours, leading to many reducing their time spent on shift, forcing the cancellation of countless operations.

Given the knock-on effect of so many surgeons and anaesthetists turning down additional shifts in recent months for fear their extra earnings could incur higher tax bills, government ministers have been scrambling to find a solution.

The DHSC has launched a consultation on three planned new flexibilities it is seeking to offer GPs, senior nurses and consultants in the hopes of addressing the issue.

If implemented, the proposed flexibilities would see these staff able to choose at the start of the tax year how much their pension pot should grow and adjust their contributions accordingly. Senior staff would also be able to fine-tune their pension growth towards the end of the tax year; knowing at that stage how much work they have done in the previous 12 months.

Additionally, if high-earners receive a notable pay rise, they would be able to phase over several years how much of the increased income goes into their pension.

Speaking about the announcement, health secretary Matt Hancock said: “Every senior clinician will be able to carry out life-saving work for patients, safe in the knowledge they have more control over their pension, their future and their retirement than at any point in NHS history.”

However, while consensus appears to be that this is progress, the response has been criticised as being something of a lacklustre fix from the DHSC.

Dr Phil De Warren-Penny, deputy co-chair of the consultants committee at the British Medical Association, explained: “It’s a useful contribution to the work that is needed to reform pension taxation laws but, while the options within this consultation will help alleviate the issues, they will not resolve it.”

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