Thousands of senior hospital doctors could face losing tens of thousands of pounds in pension benefits if they work beyond 60, according to a new financial modelling tool developed by the BMA. This is due, says the Association, to a failure by the Government to fix failings in the way in which the NHS pension scheme rules and pension taxation interact.
The new pension modeller tool allows doctors aged 59 and over and in the NHS 1995 pension scheme, to explore the impact on their pension if they continue to work full time and delay their retirement. In essence for those most experienced and senior doctors on the 1995 scheme – which the majority are – if they continue to work after they reach 60, they face losing over £100,000 in pension benefit over the course of their retirement even if they delay retiring by just a year. This is due to a combination of the current pension taxation rules – which the BMA has long said need reform – and because the 1995 NHS pension scheme has no provision to adjust the value of pension for those who want to work beyond 60. The payments, quite rightly, are adjusted downwards if a doctor retires early but the pension is not increased if they delay accessing their pension by working beyond the age of 60.
Consultant Dr Vishal Sharma, the chair of the BMA’s Pensions Committee and the Consultants Committee said:
“We have devised this tool to help doctors understand the implications of staying on in the NHS beyond 60. Many senior doctors will not want to give up work and the NHS certainly cannot afford to lose the skill and expertise they bring to the workforce and to the patients they care for. However, as this tool shows, for many it simply doesn’t pay to stay. Not all senior doctors will be affected by this to the same degree, and some may well choose to continue to work beyond 60, regardless of the impact it will have on their pensions. However, we believe that thousands may have little or no idea of the effect on their pensions of continuing to work and this online modelling tool is designed to help them make an informed decision about their futures.
“It’s also there to illustrate more widely the foolishness of the Government’s current rules on pensions and pension taxation. This problem is absolutely within the Government’s gift to put right and if senior doctors do exit the NHS, it’s due to the failure of government to put sufficient measures in place to the retain the senior workforce. The NHS simply cannot afford to see any kind of exodus of this kind – the loss of expertise, skills and experience of this level will have serious consequences for patient care and the training of the consultants of the future.”
More than 13% of the NHS consultant workforce in the UK is aged between 55 and 60. Whilst not all will decide to retire at 60, even if only a fraction were to retire to could result in the loss of thousands of the country’s most senior and experienced doctors, just at the very time they are most needed.
Whilst some of these doctors may return to work once they have retired, typically they do so on reduced hours so this still means there is a significant loss in NHS capacity; it will mean fewer patients get the specialist care they need and those who do, could wait even longer than they are currently.
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.