Doctors cutting hours to avoid pension tax bills

BMA warns senior medics being forced out by rules which mean they are ‘paying to work’

Wednesday 11th September 2019

More than half of senior Scottish doctors are planning to or have already cut down their working hours to avoid being hit by punitive pension tax bills that would see them effectively paying to work.

A survey carried out by British Medical Association (BMA) Scotland has also found more than eight in ten clinicians believe the row is having a “significant” effect on people’s care. 

Changes to the amount individuals can place in pension schemes without being taxed have seen high-earning NHS staff hit by hefty bills.

Graeme Eunson, the newly-elected BMA representative for Scottish consultants, said the charges were the “last thing” the health service needs.

It comes after figures last week revealed consultant vacancies were already at the ‘highest rate since 2007’.

The issue emerged in 2016, when then-chancellor George Osborne sharply reduced the annual tax-free pension contribution allowance.

Because the NHS pension scheme is of a higher value than many other sectors, high-earning clinicians have been stung with bills for, in some cases, tens of thousands of pounds.

Both the UK and Scottish governments have since announced changes to their NHS pension schemes.

However critics say this will lead to more red tape and does not fix the tax changes that are root of the problem.

More than 600 senior medics – mostly GPs and consultants – responded to the BMA’s questionnaire.

Four in ten had received a large pension tax charge and another two in ten were expecting one.

In response to the changes, just under a quarter of family doctors and consultants are planning early retirement and half are reducing the hours they work. One doctor said the changes “have messed up a lot of lives”.

Four in ten consultants are giving up on extra weekend and evening shifts used to bring down waiting times, while four in ten GPs are avoiding out-of-hours work.

One family doctor warned the charges could be the “end of out-of-hours services”.

Another medic asked: “What other profession ‘rewards’ its highest achievers by forcing them to pay to work?”

Dr Eunson said: “In this current state, when we are desperately calling out for more doctors, the last thing we need is to lose experienced, talented doctors to early retirement – forced out by punitive bills that actually financially penalise them for taking on work.

“This is bad for the NHS, bad for care and bad for patients. If we want to preserve already vulnerable services we need action, and we need it now.”

Dr Eunson welcomed acknowledgment of the issue by the Scottish Government, urging ministers to follow the English Department of Health, which has launched new guidance that includes greater flexibility in the pensions scheme.

He added: “This is a step forward and we desperately need the Scottish Government to act quickly to match or better this offer – which they have indicated they will - and we are pushing them hard to publish the details. We are already seeing trusts in England offer this flexibility, and the Scottish health service urgently needs the same.

“However, the long-term answer to this lies in pensions tax reform which is the responsibility of the Treasury. As our figures show today, this situation is impacting on doctors and care now. We cannot afford to wait any longer for solutions to be put in place, or we will go on losing vital capacity from the workforce.”