Explainer: pensions – a step in the right direction

Following intense BMA pressure, the Government has made changes to pensions tax which means thousands of doctors will no longer be forced to leave the NHS or reduce commitments. But more needs to be done, says Jennifer Trueland

Location: UK
Last reviewed: 9 April 2020
Rishsi Sunak

After 18 months of campaigning by the BMA, there has at last been some good news on the pensions tax crisis.

Chancellor Rishi Sunak (pictured) announced in March that the threshold income at which the charges kick in would lift to £200,000.

In practice, although it doesn’t remove the taper, it effectively means the vast majority of doctors will no longer be affected by it, so they will not be placed in the invidious – and ridiculous – position of paying to go to work.

As BMA pensions committee chair Vishal Sharma put it, it was ‘long overdue’. GPs and consultants in their droves had already reduced their workloads because of worries they would tip into the arena of punitive pension tax bills.

Dr Sharma said: ‘For the past 18 months patients have suffered, and doctors have faced an intolerable dilemma with many forced to cut short their service to the NHS, reducing hours or turning down vital additional work – not being able to care for their patients as they would want to.’

Cumulatively, that’s thousands and thousands of hours each year lost to patient care and the myriad other things doctors contribute to health services.

Will they ever come back? It’s not like the Treasury didn’t know – the BMA raised it with them as far back as August 2018.

There are also concerns the chancellor’s moves don’t go far enough. Retention of the annual allowance at £40,000 means doctors earning far less than the new £200,000 threshold income could face tax bills following a modest rise in pensionable pay – for example, if they have ‘won’ clinical excellence awards or taken on extra responsibilities. Do we really want doctors not to do these things?

Also, with no change to the lifetime allowance, many more doctors will consider taking early retirement, further depleting a workforce already under pressure.
Doctors are doing the right thing by the nation – surely the nation’s Government should do the right thing for them.