If you continue without changing your settings, we’ll assume you’re happy to receive all cookies from the BMA website. Find out more about cookies
When you visit any web site, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalised web experience.
Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.
These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms.
You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.
These cookies are required
These cookies allow us to know which pages are the most and least popular and see how visitors move around the site. All information we collect is anonymous unless you actively provide personal information to us.
If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.
These cookies allow a website to remember choices you make (such as your user name, language or the region you're in) and tailor the website to provide enhanced features and content for you.
For example, they can be used to remember certain log-in details, changes you've made to text size, font and other parts of pages that you can customise. They may also be used to provide services you've asked for such as watching a video or commenting on a blog. These cookies may be used to ensure that all our services and communications are relevant to you. The information these cookies collect cannot track your browsing activity on other websites.
Without these cookies, a website cannot remember choices you've previously made or personalise your browsing experience meaning you would have to reset these for every visit. In addition, some functionality may not be available if this category is switched off.
Our websites sometimes integrate with other companies’ sites. For example, we integrate with social networking sites such as Twitter and Facebook, to make it easier for you to share what you have read. These sites place their own cookies on your browser as a result of us including their icons and ‘like’ or ‘share’ buttons on our sites.
Earlier this week we heard that the Health Secretary, Matt Hancock, is to review the NHS pension scheme with a view to introducing further “flexibility”.
While flexibility is a step in the right direction to finding a long-term fix to the growing pension crisis impacting doctors, the Government’s planned introduction of a 50:50 offering is not the solution.
The 50:50 system used in the local government pension scheme enables employees to reduce their pensions contributions to 50 per cent while employer contributions are maintained at 100 per cent. This will not at all resolve the problems facing growing numbers of consultants and GPs. The fixed 50 per cent arrangement could result in years where doctors would still contribute at rates resulting in punitive additional tax charges and other years where inadequate pension contributions would be made by the doctor, leading to a reduced pension at retirement. If 50:50 is all that is on offer doctors will still have no other alternative, if they are to avoid these huge tax bills, than to decrease the amount of work they do – that is no kind of a solution.
Rather than a fixed 50:50 approach, doctors need true flexibility with a range of options and mitigations for excessive annual allowance charges.
The only real solution to the problem is for the Government to bring forward proposals to scrap the tapered annual allowance. As I, together with Paul Youngs, Chair of the BMA Pensions Committee and Richard Vautrey, Chair of the BMA’s GP Committee made clear in our letter to Matt Hancock just days before the announcement:
“We remain convinced that scrapping the tapered annual allowance for defined benefit schemes remains the only realistic solution to this problem.”
No one, not least hard-working doctors, should be expected to do additional work and pay for the privilege. If this happens, they will be unable to support the extra hours they otherwise willingly offer to the NHS. The tapered annual allowance must be scrapped in additional to any proposed pension flexibilities.
Rob Harwood is chair of the BMA consultants committee
Is this really as far as we have got in talks with the government? Perhaps a threat to leave the pension scheme by all senior doctors might get their attention. Our contributions and our employers must be a massive monthly revenue stream for the treasury
Removing tapering is a start, BMA should also seek to have any growth in 95 scheme ignored as this is an historic pension that was linked to a 20 year incremental pay scale. To be penalised now because you have one of the later increments in salary is unfair and can use up a large portion of annual allowance. Therefore BMA should aim to get £40000 allowance for all doctors measured just against the current 2015 scheme.
Completely agree. scrapping the annual tapered allowance should be the only solution to this crisis. BMA members very strongly feel that BMA should campaign for nothing less than that. It is such a disincentive to hard work and I cannot understand why the politicians cannot fathom that! Ultimately, unfortunately the patient will pay the price.
These issues arise when remuneration is linked to work. This misplaced concept is the bain of our modern day lives. The motivation for work should be love. Once that is lost we lose our humanity. The poverty in the UK (4th largest economy in our world) is appalling at 7 million. We doctors are overpaid! Let us instead use our money wisely to sustain the NHS, the Social Services, the Welfare State so that the principles of the Beveridge report which formed the bulwark of our social ordering can be upheld. Taxation is right. Exuberant lifestyles are not!
BMA should recommend all consultants and GPs to leave the scheme because it is they who are subsidising the scheme for the rest of the NHS employees.. at what personal cost to them! If they leave the scheme, scheme becomes unsustainable
The real issue is a flawed pension scheme. Pensions are supposed to be a savings scheme that is 'tax-free on the way in' and 'taxed on the way out'. Govt want to scrap this and make it 'taxed on the way in' and 'tax free on the way out' as they want the money niw, hence this current arrangement. However we now have a situation where we are taxed both on the way in and on the way out. Imagine you save £100 after tax and put it in the bank. After 5 yrs your money has grown to £110 before tax. When you take the money out you are taxed 40% on £110, leaving you £66 ! That's exactly what the current system is doing to our pensions and I am amazed nobody has noticed we are being taxed twice on our pensions! Come on BMA, wake up to this!
We are not opposed to fair taxation. We know that taxation is required to pay for the NHS which we all believe in. The current argument has nothing to do with wanting an extravagant lifestyle. We worry that across the nation, patients are suffering because work is not being done. The work is not being done because a modest increment in income may lead to a far greater lump sum tax demand, on the basis that our pension contributions have increased. Yes, theoretically we may benefit from this, but only if we live long enough. By all means tax our true income, but it is not fair to tax money we never see. Any doctor who feels she or he is overpaid may donate any excess income to charity, as many of course do.
I could not agree more. The introduction of the tapered annual allowance is only going to push the most senior doctors into early retirement and act as a disincentive for younger doctors to take on additional duties for fear of being heavily taxed on their pension. This will ultimately affect patient care. I have already dropped a clinical session and will not be working towards any more CEA awards. I haven’t a clue what planet the individual below is on when he feels that “We doctors are overpaid”! I spent about 15 years of my working life struggling to live and buy a house in London (my partner is also a doctor). Only now at the age of 45 are we beginning to see any financial benefits. Sadly like most others I maximised my pension as it was pretty much the only financial reward for working every hour god sends......if only I had a retrospectascope!
Leave the scheme - the only realistic solution for those (like myself) over 55 who still want to work full time, have paid in for over 30 years, purchased added years in good faith and are now penalised for breaching both annual allowances and lifetime caps. This thanks to a conservative government that claims to encourage saving!!
"We doctors are overpaid! Let us instead use our money wisely to sustain the NHS, the Social Services, the Welfare State so that the principles of the Beveridge report which formed the bulwark of our social ordering can be upheld. Taxation is right. Exuberant lifestyles are not!"
Who are you, Jeremy Corbyn?
This has got to be a troll post. Anyone who thinks we are overpaid is extremely naive. For what is expected of us, the demands placed upon us, and the costs that we meet to run ourselves as professionals, we are not that well paid.
And regardless of whether we are overpaid or not, what it really comes down to is that we are being treated appallingly by the government who have broken agreements that we signed up to when we embarked on a career with the NHS, and now we are paying the price and being told to feel grateful. A deal is a deal and it should not be re-written mid-way through a person's career because a politician on an even more lucrative income decides that it's in the country's best interest. Me walking away from my job is not in the country's best interests either...
There are a number of issues here. There is an absurd cliff-edge at the £110k mark. This was (presumably) intended as a part solution to not knowing what the pension growth amount is until way after the end of the tax year. That issue, and the potentially extremely troublesome problems from increments (and even more so temporary pensionable bonuses) for defined benefit (i.e. the 1995) scheme, is what really needs addressing. I have been wondering about whether a system that taxed contributions on the way in (which could be managed via PAYE) and had some system for taxing any additional benefit from a defined benefit scheme once it had crystallised - done via a reduction in the paid pension. Currently, you could pay a very high tax bill on a benefit you never receive. Also needs the ability to transfer the ISA allowance into additional pension allowance. Alternatively just be honest and increase the £100k+ tax band to 55% and stop messing around with losing the personal allowance / pension allowance etc. Just scrapping the taper doesn't solve the most unfair aspects of this. And as an earlier contributor says, the effect of the LTA as well seems to create the potential for double taxation.
Taxation by stealth. This country has the highest taxation now compared to USA, Canada, Dubai, Singapore or Australia and the least pay compared to these countries. Paying effective tax rate of 68% plus national insurance on earnings over £100K is absurd
Agree, the real issue is DOUBLE TAXATION. We are being conned ....... This is daylight robbery.
If you get a pay increment (meaning a jump in your pension growth 1995 scheme) that takes your earnings to £110,001, you could be paying a marginal tax rate of 1,000,000% on that extra £1 that you are over the threshold!!
If your earnings approach £110,000 in March, just take unpaid leave until the end of the tax year to avoid the 'hyperbolic function' taxation rate which could be 1,000,000% on £1.