The problem is that it doesn't help to have non-superannuable sessions as the threshold (total income) is critical. Every direction of this policy leads to working less. The unintended consequence of this policy will result in less and less clinical workforce as the cut back their hours to escape the punitive tax bills.
The problem with this model is that GPs will have to reduce their pension contribution to such a low level to counteract the subsequent increase in overall they will receive by not taking the pension. This means that their pension pot will increase by a minimal amount only- possibly this is the wish of the Government to prevent larger pensions being accrued.
The problem with coming in and out is that your income rises as you receive the employers and employees contribution. So the problem does not go away as although you have lower growth your income is higher. The only way to sort the issue is to work and earn less. This is what this change has caused. Doctors giving up paid work. Not ideal.
Having read the document I think they will block for crimes such as murder or convictions for treason or offences under the Official Secrets Acts where the member has been sentenced to at least 10 years imprisonment. I don't think it is for parking tickets...
Shah Ali, yes, this is what is means. If you leave early you need to pay back the discount that you received. So you are better off if you stay with the MDU but you might need to stay until 67 (if in 2015 scheme) or they charge you the discount you received over a 7 year period- not sure if you can just pay it as a lump sum in one go.
The 2015 pension changes made by the Government were terrible. It worked because they split the profession and allowed the older doctors to say in the scheme that was clearly better whilst penalising younger doctors and forcing them to work until they drop. I am watching this closely. Let's hope that they can prove an age discrimination that was clearly the case.
The NHSE contract document says that the 1.4% baseline uplift incorporates the £1.76 pp payment so I am confused as to whether this is in this figure or a separate payment. Anyone know?
Simple terms. Your NHS pension is growing each year and it grows quite substantially in some cases. You are most at risk if you have taken on extra work or increased your pensionable income. The amount it has grown will be sent to you each year and you will have a separate amount for the 1995 scheme and 2015 scheme. You have an allowance (40K) that if you breach you get taxed badly. However, if you earn too much then they reduce down your annual allowance depending how much you earn. They add your growth to your income in some cases to sting your annual allowance. Basically means a whopping extra tax bill you didn't see coming that will force you out of the pension scheme or require you to dip in and out.
This applies to all pensions so you cannot go to a private pension. The interesting thing is that they have a random number generator to calculate NHS pension growth. However, if your private pension grows by a million pounds this is just deemed as lucky and you don't pay any tax.
The incentive here is not to take any additional work that you cannot route through a private company. But if you go through a private company, then you cannot take it out as that compounds the problem if you do.
The whole issue stinks if you ask me..the Government moved to a 2015 scheme- that didnt destroy us enough so they thought up the annual allowance to tax us into submission.
This is a massive raid on NHS pensions and it forcing many people out. Younger doctors will not even be able to join as their salary increases will trigger huge annual pension tax bills. This is a clever game by the Government to force doctors out of the pension scheme. What has changed only means you can opt to destroy your yearly pension income rather than pay the lump sum now.
It is also likely that in the budget we will see a reduction in the annual allowance, possibly down to 20k.
Many doctors just don't know about this issue but at the end of this month we will all be receiving annual allowance statements. There will be many who just don't know about this issue and will get a rather large shock!