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BMA briefing: Pensions

The BMA has briefed MPs and peers regarding the impact of the tapered annual allowance and the lifetime allowance on the recruitment and retention of doctors across the NHS.

The current system of pension taxation means that growth in income and pension benefits can be taxed repeatedly, sometimes generating bills that are larger than the amount being taxed. Public-sector workers including doctors are particularly affected by these problems. We believe that such an approach is undermining the ability of doctors to do additional work and encouraging them to retire early. Urgent reform is required to avert a deepening of the NHS’s medical staffing crisis.

Key points

  • Fundamentally we believe that the tapered annual allowance should be abolished and that its use in any form will continue to negatively impact the retention of doctors, workforce planning and cash flow across the NHS.
  • We are concerned that the annual allowance is disproportionately impacting on doctors making them more likely to reduce their hours or retire sooner. This in turn affects workforce pressures across the health service, further impacting on an already over stretched and under staffed NHS.
  • In instances where doctors then find that they have no allowance to carry forward and are likely to be faced by a tax charge year on year, they feel there is no alternative but to consider reducing work/opting out or retirement.
  • While we welcome the expansion of the ‘scheme pays’ system, which will mean that doctors are no longer liable to pay the tax charge via their tax return, where they are forced to find the money from savings or loans if they exceed the allowance, this is not a solution to the overall problem caused by the existence of the annual allowance.
  • We believe the tapering annual allowance should be abolished in its entirety, but while it is still operating it is crucial that in addition to the expansion of the scheme pays system further flexibilities are incorporated into the tapering system. This will help doctors to better plan and predict when and how surplus charges will be applied to them. This in turn, we hope, will improve retention of doctors.


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