Statement on the NHS Pension Proposal
Relevant updates and responses:
4 December 2019
On 22 November 2019 NHS England and NHS Improvement proposed to allow pension tax charges to be paid as ‘Scheme Pays’ with the commitment to pay clinicians a corresponding amount upon retirement as a temporary solution for 2019/20.
As yet there is very little detail on how this will be enacted; the Association seeks answers on multiple points which need to be clarified in the proposal:
- Additional work done in 2019/20 could easily reduce or obliterate the annual allowance carry forward for next year. Thus one could simply end up with a bigger bill next year. How can the proposal protect individuals from larger tax bills in the following year?
- The proposed plan seems to suggest that the restitution will be by means of an ongoing payment in retirement to make up for the Scheme Pays charge. However, this could be viewed as income and taxed; more clarity is needed on how this will be implemented.
- Some clinicians accessing this facility may have more than 20 years to work before retirement. Following access to this scheme, will repayment be guaranteed by subsequent governments? What will be the mechanisms in place to prevent future governments defaulting on repayment or changing legislation to remove this guarantee?
The Association continues to call for pension arrangements that do not penalise staff for taking on additional work.
Association President Dr. Kathleen Ferguson commented: “The current workforce crisis is being added to by the massive disincentive to taking on additional work created by punitive pension taxation rules. Together these present a huge challenge to the health service which is reporting gaps in services and increased waiting lists. So far, the Government has been slow to respond.We appreciate that NHS England and Improvement acknowledge the problem, but the Treasury see no benefit to changing their course. The proposal raises more questions than answers, and until these are resolved, the pension issue will continue to deter senior doctors from taking on additional work. Right now, with winter pressures adding to the workforce gap, the NHS needs everyone to help alleviate staffing problems.”
The Association awaits developments between the BMA and the Government and for details on the proposed pension arrangement and consultation to be released.
Previous pension statements and other useful documents from the Association: