Hanging on to your hard-earned cash
Do you get the feeling that somebody up there doesn't like us? We have been told there will be no pay rise for GPs next year. We have also been told there will be a likely 42% hike in employee superannuation costs and possibly a goal post move to avoid all of the past three years' pay rises reflecting in our pensions. The government certainly seems intent on making us pay for working so hard to deliver much higher standards than expected.
In a recent article I discussed how to focus on reducing practice expenses, especially staff costs. We must now make a tremendous effort to reduce personal outgoings. We need to hang on to our money and keep spendable income up.
Most of the following apply not just to principals but to salaried GPs as well.
1. Check tax savings rates
Annual tax payments of £50,000 or more are now the norm for the average principal. The wise save monthly for their January and July bills. Interest rates rose last month, but not all savings accounts have reflected this. Check whether you can get a higher rate by changing accounts. Every 0.5% extra interest generates about £600 extra a year. The same applies to any other savings you have.
2. Consider an offset mortgage
With most GPs paying tax at 40%, an offset mortgage can save money if linked to salary, tax and other savings. If you have a fixed-rate mortgage reaching the end of its fixed period consider this option.
3. Pay defence subs monthly
With defence subscriptions now approaching £5,000 a year, why continue to pay in one lump sum? Take up the offer to pay over several months. There is no cost for this and you can earn interest on the balance or smooth out your cash flow.
4. Review communication costs
Most GPs use a proportion of mobile phone, home phone and home broadband time for business. Costs vary considerably from different suppliers. And the price of the latter two is falling dramatically. Always shop around when each contract comes to an end.
5. Reduce motoring costs
Shop around for your annual motoring insurance. Consider switching to diesel (or even LPG) when you change you car. Use www.petrolprices.com to find the cheapest fuel costs in your area – these change surprisingly often.
6. Review locum insurance
If you have locum insurance, ask yourself whether you are over-insured. Do you actually need all this cover? Practices with high average list sizes are more likely to get locum reimbursement from the PCT (but do confirm this in writing). Conversely large practices can compensate for a sick colleague more easily, at least for a time. Confirm details via your practice and partnership deed.
7. Generate more non-practice income
If all else fails, you still have the option of working in your own time. Locum or out-of-hours work is now much more flexible than prior to nGMS, and demand for GPSIs is growing.
Fortunately our patients like us in a way that politicians don't. Perhaps our political standing will change when the next general election approaches. We may yet make a welcome return to the heady heights of 'jewel in the NHS crown' – when this becomes a political expediency.
John Couch is a GP in Ashford, Middlesex