The professional association and trade union for doctors in the UK has warned the government that a “perfect storm” is brewing in the sector, caused mainly by pensions taxation rules.
In an open letter to the Chancellor of the Exchequer, the British Medical Association (BMA) said doctors were considering reducing their NHS working hours unless there was tangible reform to the NHS pension scheme.
It said current pension and tax rules were creating a “perfect storm” in the NHS workforce, forcing senior consultants to reduce their hours, retire early or leave the health service altogether to avoid a “disproportionately large” additional tax burden.
Rob Harwood, chair of the BMA’s consultant committee, said: “It cannot be right that doctors working extra hours to reduce waiting lists or cover rota gaps are then hit with additional tax bills greater than the value of the extra hours worked.”
The letter was the latest in a series the BMA said it had sent to the government. The BMA voiced disappointment that neither the government nor NHS Employers had tackled the issue, and it was the association’s responsibility to inform and protect its members.
Harwood said: “Unless action is taken, our only option is to reduce the amount of time we work for the NHS, which will through no fault of our own, be detrimental to our patients and to the country’s health service – exactly what the BMA has been trying to avoid.”
The NHS Pensions Scheme is a government-backed statutory, unfunded, defined benefit occupational pension scheme that is open to all NHS employees and employees of other approved organisations.
A Treasury spokesperson told IPE it was aware of the concerns raised by NHS staff and was discussing the issue with the department for health and social care.
He said the Treasury understood the value of pensions, “which is why we allow the majority of savers to make contributions tax-free and doctors, like all NHS staff, benefit from one of the best available defined benefit occupational pensions schemes. But we do have to get the balance right between encouraging saving and managing government finances, which is why we restrict the tax relief available for the highest earners.”
Most UK workers can save up to £40,000 (€46,360) in a pension every year without incurring the annual allowance tax charge set by government. The allowance begins to reduce once someone earns more than £150,000 in a year.
The Treasury said than less than 1% of pension savers will have to reduce their saving or face an annual allowance charge as a result of the tapered annual allowance.
This article was updated to include comment from the Treasury