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Pensions: hard work rewarded with penalty

ARM 2019 Annual Representative Meeting conference hall audience
BMA ARM 2019

Pensions can normally be seen as simple machines for a simple job. You pay in for an income on retirement. Like aeroplanes or cars, there's no need to understand their complexities – as long as they do what they promise.

The NHS pension scheme for doctors is, however, in a horrible fix, forcing the profession to open the lid and get intimate with its complexities.

Senior doctors are cutting their hours, retiring early and turning down extra responsibilities or shifts because of the machinations of punitive pension rules.

Rules on their tax-free annual pension allowance are ‘rewarding’ this extra work or responsibility with tax bills not remuneration as you’d expect.

In an increasing number of cases, doctors are billed more than they’d earn for going the extra mile. It’s like the Treasury’s ditched a bloody great spanner into the pension works and at a time when the NHS needs all the help that it needs.


Limited powers

BMA consultants committee deputy co-chair Phil de Warren-Penny (pictured below) likened the NHS pension scheme to a complex system of tiny, linked cogs at – the association’s annual representative meeting in Belfast.

ARM 2019 Annual Representative Meeting Phil de Warren-Penny Motion 38 Annual allowance

‘We only have control of one cog,’ he said. ‘The Government has, in its control, all of the others. The only way we can mitigate our tax charges is how much we earn.’

So doctors were sticking to contracted hours and turning down roles to manage services or overseeing the training of trainees. Psychiatrists are declining to carry out Mental Health Act assessments on patients for fear of incurring a personal cost through a tax charge for providing this vital service.

When asked to cover a shift to help colleagues, doctors are forced to do so for time off in lieu – not pay – as bumps in remunerations would spark the tax charges introduced by the ‘iniquitous’ Treasury rules.

‘These are already things that are taking place,’ Dr de Warren-Penny said.


Complex legislation

BMA pensions committee deputy chair David Bailey said the punitive pension rules were having a ‘catastrophic effect’.

‘In a climate where acute shortages are damaging patient care, the Treasury doesn’t appear to understand the ins and outs of this absurdly complex piece of tax legislation which it put in,’ he adds.

The Government’s offer to solve it, the so-called ’50-50’ response, was a ‘cynical insult’, Dr Bailey said. ‘It is practically robbery for a GP. It’s Alice in Wonderland economics.’

Dr Bailey called for the BMA to ‘actively lobby’ the Treasury to act decisively to improve the NHS pension scheme – something it has already vigorously pursued since the problem was spotted.

Doctors voted overwhelmingly in favour of this move and a series of other measures intended to restore the NHS pension scheme to what hard-working doctors would expect it to be.

Consultant radiologist Tony Goldstone (pictured below), with whom the BMA is working on a pensions calculator to help members, said: ‘These punitive and ill-conceived taxes are destroying the very lifeblood of our NHS in every branch of practice.

‘Doctors do not mind paying their fair share of progressive taxes. But when someone has to pay to go to work, not even for a benefit to their pension, something has gone badly wrong.’

ARM 2019 Annual Representative Meeting Tony Goldstone Motion 38 Annual allowance

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