NHS Finance

05.06.19

New government proposals put forward to tackle NHS pension crisis

The government has put forward plans to reform the NHS pension scheme and provide top doctors with more flexibility in response to growing concerns that a “perfect storm” of tax and pension rules are forcing staff to reduce their hours or leave the NHS entirely.

The so-called ‘50:50’ proposal would allow clinicians to halve their pension contributions in exchange for halving the rate of pension growth, and a 12-week consultation on the plans will begin later this month.

The move is in response to calls from senior doctors that “punitive” tax charges are discouraging them from taking on extra work and in some cases forcing them to retire early or leave the NHS, according to the BMA.

Under the current rules, a senior doctor working a three-and-a-half-day week could lose £10,000 from their annual pension if they continued to work a full week, discouraging them from taking extra shifts to support patients.

An independent review of the GP partnership model found that this issue was a factor for many GPs deciding to retire early, and the BMA said its members had sent over 1,600 letters to MPs about the inequity of current pension rules.

The Department of Health and Social Care said the new proposals would offer a new pensions option, allowing doctors to build their NHS pensions more gradually over their career “by making steadier contributions… without facing regular, significant tax charges.”

The agreement is an important part of the NHS’s interim People Plan which was published earlier this week in a bid to tackle the health service’s current workforce crisis by training, hiring and retaining thousands of more staff.

Health secretary, Matt Hancock, commented: “Our NHS runs on the hard work and dedication of brilliant staff who deliver world-class care for patients every day. Each and every senior consultant, nurse or GP is crucial to the future of our NHS, yet we are losing too many of our most experienced people early because of frustrations over pensions.”

Hancock said the government had listened to the concerns of staff and was determined to find a solution that better supports senior clinicians.

He added: “The reforms we are setting out today will give clinicians greater flexibility to manage their pensions, have more control over their future, and offer a deal that’s fair to doctors, taxpayers, and the patients they care for.”

Image credit -  Peter Byrne/PA Wire/PA Images

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