Government plans pension changes to help senior NHS doctors work longer hours

By PA Reporters

Plans to change pension rules to enable NHS consultants and GPs to work longer hours without big tax bills will be set out by Health Secretary Matt Hancock on Wednesday.

Health leaders in England have warned that NHS waiting lists are soaring because senior doctors are refusing to take on extra work.

The Department of Health and Social Care estimates that one third of consultants and GPs may be reluctant to take on extra shifts on top of their contracted hours because they risk breaching limits on tax relief.

It is launching a consultation on proposals that will allow senior clinicians to maximise the amount they can put towards their pension without becoming liable for large additional tax payments.

Matt Hancock (Victoria Jones/PA)

Mr Hancock said: “Today we’re taking a decisive step in fixing this issue for good so patients can feel the impact in GP surgeries and hospitals across England and we are already helping hospitals ease the immediate burden with new advice on action which can be taken now.”

Among the proposals is that senior doctors be allowed to choose a personalised pension growth level at the start of each tax year and pay correspondingly lower contributions.

A further option to fine-tune their pension growth towards the end of the tax year, when they are clearer on total earnings, would allow them to “top up” their pension pot to the maximum amount without hitting their tapered annual allowance limit, the department said.

The changes would have an impact on those earning more than £110,000 a year who were affected by the 2016 introduction of a tapered annual tax allowance.

The department said it wanted to introduce the proposals in time for the start of the new tax year, subject to the consultation response.

The NHS Confederation, which represents 85% of NHS providers and commissioners, welcomed the proposals but called for the 2016 tax changes to be reversed.

Niall Dickson, chief executive of the NHS Confederation, said: “Change cannot come quickly enough to the pension rules. We have seen senior clinicians cutting their hours, leading to cancelled operations and growing waiting lists.

“Today’s revised consultation offers some hope, but we continue to urge the Government not just to add more flexibility, but to scrap the tapered allowance altogether.

“The repercussions for patients will only worsen without reform and the most effective way to do that would be to get rid of the taper.”

NHS Providers said in July that consultants and senior managers are declining shifts, leading to a massive impact on patient care.

One hospital reported a 50% increase in the numbers waiting for routine surgery, with staffing issues due to the pensions problem partly to blame.

A poll for the BMA found that many doctors were being driven to cut hours and retire early.

Six out of 10 of the 4,000 consultants in England responding to the survey revealed early retirement plans, with many blaming the penalties caused by pensions arrangements.

BMA consultants committee deputy co-chairman Dr Phil De Warren-Penny, said: “We are encouraged by the news of the consultation – it is something we have pressed the Government on for some time.

“It’s a useful contribution to the work that is needed to reform pension taxation laws, but while the options within this consultation will help alleviate the issues, they will not resolve it.

“To succeed we need to see NHS employers doing their part and recycling all of the employer contributions. If they don’t it’s still an effective pay cut for doctors for doing extra shifts.

“The Government must not wait until the damage is done and patients have paid the price before it implements these much-needed reforms.

“By then it will be too late for thousands of doctors and too late for many patients.”