BMA says Chancellor has imposed 'an unfair tax on doctors' and survey shows many now plan to leave the NHS before their expected retirement

by BMA media team

Press release from the BMA

Location: UK
Published: Wednesday 3 March 2021

Responding to the Chancellor of the Exchequer’s Budget announcement of the freezing of the lifetime allowance for pensions, the BMA says it’s a tax which will disproportionally affect doctors and, as a result, many plan to now leave the NHS or reduce their hours.

The chair of the BMA pensions committee, Dr Vishal Sharma said:

“Ahead of the Budget, we surveyed our members to gain their views on the impact of a freeze of this kind. Over eight thousand doctors took part in the survey. A staggering 72% of responders to the question, 'If the level of the lifetime allowance is frozen in this year's Budget, what impact if any will this make on your plans around retirement?' said they were more likely to retire early.

“Freezing the pension lifetime allowance is a bad decision and is creating the perfect storm, forcing an exhausted workforce – many of which are already planning to work fewer hours – to make some very tough decisions such as working fewer hours or leaving the NHS long before they would naturally retire. If they don’t, they will face huge pension taxation bills because the NHS pension scheme is not flexible enough to allow doctors to vary and manage their contributions. They simply cannot keep working and face these huge pension tax bills as a result.”

Doctors were also asked "If the level of the lifetime allowance is frozen in this year's Budget, what impact if any will this make on any plans you might have around changing your working patterns?"

61% said they’d be more likely to work fewer hours or work part-time.

Dr Sharma continued:

“The potentially disastrous impact of this on the NHS and patient care is unthinkable, especially at the current time when the impact of COVID-19 and the backlog of patient care is so acutely felt.

“Today’s move by the Chancellor is nothing short of a punitive tax on our hardworking doctors and it is simply unacceptable. The BMA has repeatedly called on the Government to find a way of mitigating against large pension taxation bills for doctors to avoid them having to leave the NHS and deprive our health services of thousands of hours of skilled care.

"Only last week, the Government announced a solution to this problem for judges. The BMA is calling for them to do the same for doctors, with almost half of doctors saying they would retire later and work more hours if this was introduced.”

 BMA chair of council Dr Chaand Nagpaul said:

"Almost a year ago to the day, the Chancellor told the country that the NHS would get 'whatever it needs' to tackle the pandemic. Yet we can see from today’s Budget that the rhetoric is far from the reality. The levels of infection may be slowly reducing, but the NHS remains under more strain than at any other time in recent history. A backlog of 4.5 million patients are now waiting for operations, with more than 224,000 people waiting more than a year – the highest number in over a decade.

“The BMA wrote to the Chancellor last month setting out the 'must haves' needed to enable our health service to meet the pressing needs of the nation as we recover from the pandemic. We know that even before the pandemic, independent analysis showed that the NHS needs as a minimum a mean annual growth in core funding of 4.1% – today’s announcement does not address this significant shortfall that will continue to penalise patient care.

“Further, tackling the huge unprecedented and growing backlog of non-COVID care will require extra dedicated funding and resource. The BMA estimates that this will potentially require additional NHS funding of between £4bn and £5.4bn to work through. The Government must urgently set out a clear plan to provide this resource.

“Equally important is growing our healthcare workforce to ensure the NHS is able to meet both current and future demand. We need many more places in medical schools to help train the doctors we’ll need and our current workforce needs support to recover from the ravages of this pandemic. BMA research during the pandemic has shown that over a fifth of doctors are considering leaving the NHS or taking early retirement, whilst over half are planning on reducing their hours once the COVID crisis is over. Ministers must act now to avert a crippling NHS workforce crisis.

“Further, the decision by the Chancellor to freeze the pensions lifetime allowance to 2026 will inevitably lead to the NHS losing even more of its most experienced doctors. For the sake of our health service, the Government must urgently find a solution to prevent this possible exodus.” 

ENDS

Notes to editors

The BMA is a trade union and professional association representing and negotiating on behalf of all doctors in the UK. A leading voice advocating for outstanding health care and a healthy population. An association providing members with excellent individual services and support throughout their lives.

  1. Full survey results here.

Question: If the level of the lifetime allowance is frozen in this year's Budget, what impact if any will this make on your plans around retirement?

  • It will make no difference / I have no plans 9.02% (663)
  • I would be more likely to retire early 71.88% (5,286)
  • I would be more likely to work for more years than previously planned 15.39% (1,132)

 

Question: If the level of the lifetime allowance is frozen in this year's Budget, what impact if any will this make on any plans you might have around changing your working patterns

  • It will make no difference / I have no plans 22.06% (1,612)
  • I would be more likely to work fewer hours/ work less than full time / part time 60.60% (4,429)
  • I would be more likely to give up additional responsibilities / roles 41.23% (3,013)
  • I would be more likely to work as a locum 13.37% (977)
  • I would be more likely to work more hours 1.33% (97)
  • I would be more likely to take on additional responsibilities / roles 1.07% (78)
  • I would be more likely to take a career break 11.66% (852)
  • I would be more likely to change specialty 1.22% (89)
  • Other 5.68% (415)

 

Question: Are you planning to retire from the health service before your normal pension age? The age at which you can take early retirement depends on which sections of the NHS pension scheme you are enrolled in (i.e. age 60 for the 1995 section, age 65 for the 2008 section, state pension age for the 2015 section). Total responses 7757

  • Yes: 54.20% (4,204)
  • No: 20.23% (1,569)
  • Not Sure: 25.58% (1,984)

 

Question: Why are you planning to retire before your normal pension age? Total responses 4060

Top 3 responses:

  • Impact of lifetime allowance tax on pensions 75.27% (3,056)
  • Volume of workload / Work life balance 65.99% (2,679)
  • Impact of annual allowance tax on pensions 64.90% (2,635)