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Call to rethink pension tax rules

Retirement, iStock/Getty images
DECISIONS: Accountants are advising GPs to retire early

Doctors have called on the Treasury to rethink the taxation rules around pensions, which are encouraging GPs and consultants to cut their hours, retire early or leave the scheme entirely.

BMA council chair Chaand Nagpaul has warned the chancellor Philip Hammond that the rules risk deepening the recruitment crisis in general practice, a part of an NHS which already faces a ‘drastic shortfall’.

The rules penalise senior consultants financially when they take on extra work and can discourage them from putting forward innovations on treatments and working practices.

Army doctors are also being forced to reconsider their careers as the rules hit their pensions when they rise through the ranks.

‘We would very much like to engage with the Government to look at ways to address this problem,’ Dr Nagpaul says in the letter.

‘GPs are being actively encouraged by accountants to reduce their commitment or, for those nearing retirement, to stop work altogether,’ it adds.

‘This will naturally impact on the Government’s stated aim to attract 5,000 new GPs in England by 2020.’

One of the main rules that doctors have asked to be changed relates to the annual allowance charge in the ‘defined benefit’ schemes of public sector pensions.

Concerns about this rule have been echoed by other unions, representing police, firefighters, dentists, nurses, and civil servants, among others.

‘The unions representing these groups have advised on the significant recruitment and retention problems arising from staff being unwilling to attract a pay increase from a promotion or to undertake additional work, for fear of our potential to attract an annual allowance charge,’ Dr Nagpaul’s letter states.

The BMA is calling for greater flexibility for a range of complex pension rules which make it difficult for members to work out and control their pensions.

‘For many, they feel that the only solution is to opt out of scheme membership,’ the letter adds. ‘Not only may this not be in their best interests but is certainly not in the interests of the NHS pension schemes.’

Read more about pensions and the annual allowance

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