Matt Hancock, Secretary of State for Health and Social Care has recently stated “NHS doctors do extraordinary life-saving work every single day – they should not have to worry about the tax impacts if they choose to go the extra mile by taking on additional work to help patients.”
This statement was in response to the current Pension crisis that is occurring amongst GP’s and Consultants.
In recent months, doctors have started refusing to do overtime shifts because they will then be landed with costly tax bills resultant to the Government’s current pension rules.
A recent survey by the BMA reported that 42% of GPs and 30% of Consultants had already reduced their working hours over actual or potential pension charges. Those who had not yet reduced their hours, 34% of GPs and 40% of Consultant’s said they were planning to do so for the same reason.
This means that waiting lists and times have dramatically increased and hospital departments are being left severely understaffed.
Boris Johnson has put forward a plan to allow doctors complete flexibility when it comes to scaling down their pension contributions to avoid breaching their annual tax-free allowance.
The Government has reduced the allowance from £255,000 a year in 2010-11 to £40,000 and further drops for the highest earners. This means that those earning more than £110,000 are affected, equivalent to a third of GP’s and Consultants.
The current rule states that public sector staff could forsake half the amount paid into their pension, but now the Government have said they will publish a consultation which will give public sector staff the ability to reduce their contributions to zero. This will also allow doctors to be given the contributions the employer would have made, which means their pay packets could be boosted by thousands of pounds a year.
The plans are set to introduced in April 2020, however, in the meantime the Government has promised to allow doctors to opt out from the pension scheme for this financial year.
Johnson hopes this will relive the pressure on hospitals who have reported waiting lists are lengthening because doctors are refusing the extra shifts.
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BBC News. (2019). Ministers act to end NHS pensions row. [online] Available at: https://www.bbc.com/news/health-49196357 [Accessed 7 Aug. 2019].
Onmedica.com. (2019). OnMedica - News - Johnson promises to tackle pensions crisis. [online] Available at: http://www.onmedica.com/newsArticle.aspx?id=9a4fcac5-3148-4572-9f93-c1fca973228f [Accessed 7 Aug. 2019]