The NHS has agreed to let doctors defer the cost of a pension tax penalty which they had to pay each year when contributions were hit by the ‘tapered annual allowance’.
The change was one of a number of moves called for by BMA council chair Chaand Nagpaul in a letter to the chancellor Philip Hammond in August.
Under the change, the NHS BSA, which manages the service’s pension scheme, can now pay a tax penalty imposed on doctors and other public sector workers in exchange for a reduction to their benefits at retirement.
The penalty accrued as a result of a ‘taper’ on the annual pension allowance which deterred senior staff from increasing pay through promotion, taking on extra work or leading innovation.
Concerns about the penalty have been echoed by other unions, representing policy, firefighters, dentists, nurses and civil servants, among others.
Dr Nagpaul had pointed out that the charge penalised senior doctors financially and undermined efforts to recruit and fill posts.
‘GPs are being actively encouraged by accountants to reconsider their careers as the rules hit their pensions when they rise through the ranks,’ his letter to the chancellor states.
‘This will naturally impact on Government’s stated aim to attract 5,000 new GPs in England by 2020.’
Army doctors were also being forced to reconsider their careers as the rules hit their pensions when they rise through the ranks.
Dr Nagpaul welcomed the Government’s offer to cover the tax charge change and pledged to continue to press for wider improvements to pensions.
The change brings England into line with Wales and Scotland.
The story so far
Read more from Keith Cooper and follow on Twitter.