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Gold, incentives and meh

GP pensions to be 'more flexible' to improve retention

The Government has announced a review to make pensions 'more flexible' for GPs in a bid to tackle retention issues. 

Under new plans released today, the Government will reform the pension system to enable high earning GPs, alongside consultants and other senior clinicians, to build up their pension more slowly 'by making steadier contributions towards their pension, without facing regular significant tax charges'.

The Government has suggested a 50:50 section, which would see doctors reduce their normal contributions towards their pension pot by half and receive half the amount of their pension in return. 

Under the current NHS pension scheme, the highest earning GPs have to pay 14.5% in contributions, but an annual allowance worth £40,000 limits the amount of money that can go into the pot each year without facing significant tax penalties. 

The annual allowance starts to reduce from this level for high-earners with total income over £150,000 per year. The minimum tapered annual allowance is £10,000, which only applies to those who earn more than £210,000. 

GP leaders previously warned that the annual allowance and concerns over large tax bills have caused serious damages to recruitment and retention, with doctors either reducing their hours or taking early retirement as a result.

Only those who have built up more than £40,000 in contributions in their NHS pension in a year and/or have an adjusted income of over £150,000 will be affected by the new 50:50 proposal. 

But BMA chair Dr Chaand Nagpaul argued this option will not prevent people from reducing their working hours.

He said: 'For many months, the BMA has been expressing concerns about the current pension taxation system, the unintended but serious consequences this is having on patient care and the wider NHS and so we welcome the fact that the DHSC and NHE England have today acknowledged the problem.

'We welcome that in his announcement the secretary of state has stated that in addition to the 50:50 proposal in the interim Peoples Plan, he is willing to discuss with the BMA other models for pension flexibility in order mitigate the current disincentives for doctors to provide NHS services.'

He continued: 'The BMA has already outlined a number of temporary mitigations which, if swiftly applied, would stop experienced doctors leaving the NHS or reducing the hours of patient care they provide and we are giving a cautious welcome to the fact this is a step in the right direction for reform. We have modelled the proposed 50:50 scheme and it is clear that by itself this proposal will not remove the disincentive for doctors to reduce their working hours. It needs to be part of wider reform. 

'Given the complexities of the NHS pension scheme and the fact that individual circumstances vary, it is essential that any flexibility offers far more than simply paying half of the employee’s contribution in order for half the accrual of pension. In addition, there needs to be the ability to recycle the employer’s pension contribution on the percentage of pay that is no longer pensionable. This is commonplace in other sectors with the Chancellor describing such payments as ‘regular’.' 

Health secretary Matt Hancock said: 'We have listened to the concerns of hardworking staff across the country and are determined to find a solution that better supports our senior clinicians so we can continue to attract and keep the best people.

'The reforms we are setting out today will give clinicians greater flexibility to manage their pensions, have more control over their future, and offer a deal that’s fair to doctors, taxpayers, and the patients they care for.'

In January, Pulse revealed that health secretary Matt Hancock was in discussions with the Treasury over changing the tax treatment of pensions due to the effect on GP retention, saying it is the ‘biggest concern’ GPs raise with him

It emerged last month that there has been a 'sharp rise' in the number of GPs seeking pension advice, with some GPs facing personal bills of up to £50,000.

This came after research from Royal London revealed that doctors have resorted to a 'hokey cokey' approach to mitigate tax issues.

Readers' comments (19)

  • For those of us who are fully tapered this plan is useless. Even at a 50% contribution I’ll be putting in 35k, meaning a potential AA tax bill annually of 45% of 25K. No thanks. I will definitely not be opting back into the scheme.

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  • Ditto

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  • Agree with Really?!

    sticking plaster mentality to a compound #

    Are these clowns for real??

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  • FUNNY NOW THAT THE DAILY NUTTER IS SAYING "SOMETHING MUST BE DONE"...WE "MUST HAVE MORE GPs".

    IT WAS THE DAILY CRIMINAL THAT HAS TERRORISED GPs FOR A DECADE AND NOW IS BEMUSED AT WHY THEY ARE ALL LEAVING.

    YOU, YES YOU THE DAILY CRIMINAL SHOULD BE CHARGED WITH "MORAL CRIMES" AGAINST SOCIETY AND THE EDITORIAL BOARD HELD ACCOUNTABLE FOR THESE "MORAL CRIMES".

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  • Too late tax man decided I was retiring two months ago
    Doing 3 sessions less and getting more money

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  • Way too little and way too late. Making this only eligible for people who meet certain criteria is ridiculous, for a system which actually does not cost the government anything.

    As many have said it is not enough to stop the people retiring and not enough to encourage highly skilled individuals (with huge amounts of training costs) to work more hours.

    There should be massive steps to encourage people working longer hours - they should be rewarded rather than punished by the pension system (if not the tax system).

    I do not see why a GP working 10 sessions should pay a higher percentage of their income towards their pension scheme when compared to a GP working 3 sessions. If you want to encourage GPs to work longer hours it should be the other way around.

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  • When I was in practice, after the nGMS contract, it took awhile to work out what the partners' incomes were for the preceding tax year.
    Now that you have the additional complication of Capita incompetence, and a significantly higher employers contribution being calculated back by HMRC, will it be possible for GPs & their accountants to work out pension contributions before the deadline for filing?

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  • THE TORIES ARE ALWAYS BANGING ON ABOUT "MARKET FORCES" BUT, OF COURSE, THIS ONLY APPLIES TO THEIR BANKING AND BIG BUSINESS FRIENDS.

    THE GP CRISIS NEED NEVER HAVE HAPPENED...IT WAS "MADE IN ENGLAND...BY THE TORIES"

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  • Oh dear, those in government are not listening. Well, GPs will continue to vote with their feet. In the long run it will cost HMG more, but I guess that they are not in it for the long run.

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  • The usual half measures. Sorry I am not putting in anymore pensions as clearly the message is they do not care. By the way, if one is charged with Gross Negligence Manslaughter, ALL your previous pension payments gets confiscated. In this high risk environment, I'll work less and spend whatever money and enjoy it for now as the system punishes savers and the hardworking. There is no need to go for higher aspirations, it is a race to the bottom.The money is safer with me than with the government.At least I earned it and knows where it is.

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