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Gold, incentives and meh

GPs in their 30s 'being told to cut clinical hours' to avoid pension charges

Younger GPs are being advised by their accountants to cut clinical hours to avoid extra pension charges, the BMA GP Committee chair has warned.

Dr Richard Vautrey told Pulse this is a growing problem across the country that will impact general practice for decades to come.

He said both the BMA and NHS England have been raising the issue with the Treasury, and are calling for changes to the pension scheme to ensure GPs can continue seeing patients without being worried that they are effectively paying to work.

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. However, there has been no reported movement on this issue.

Speaking to Pulse, Dr Vautrey said this is a ‘really big problem’ that does not just impact older GPs, as many younger GPs are now being advised to cut hours.

He said: ‘The issue relates to the annual allowance relating to pension contributions. Many people may think this is a problem for older GPs near retirement, but the big problem is the loss of service from younger doctors.

‘They are being told by accountants and financial advisors that if they are working full-time – nine sessions a week typically – and their earning are above a certain level, then they will be penalised on an annual basis. They are being advised that the best way to tackle this is reduce their clinical commitment, reduce their earnings, and thereby protect themselves.’

Dr Vautrey continued: ‘Doctors in their 30s who have potentially another 30 years to offer the NHS, we are losing them each and every year. It’s having a major impact and it’s one of the reasons why we are struggling to offer enough appointments to our patients.’

‘This is one of the big factors driving the shift towards part-time working. It’s almost costing GPs to work, because of these punitive charges. We have to remove this disincentive for doctors that want and are willing to work.’

Dr Vautrey explained the issue is being repeatedly raised by GPs, as the GPC carry-out the new five-year GP contract roadshows.

The contract – published last month – saw several major changes to general practice, including the move towards primary care networks, something practices will be paid to join.

It also pledged that the BMA and NHS England will lobby the Government together around a partial payment agreement for pensions, meaning GPs would not have to pension their entire income.

Dr Vautrey said they have been in ‘regular’ contact with the Treasury about this.

‘This is happening right across the country, and I think it has become a bigger problem this year, because previously there was an ability to carry forward unused allowance from one year to another, but this has really run out now. So it can no longer protect doctors, so this year it’s become an acute problem,’ he added.

In 2016, the amount GPs were allowed to save into their pension before incurring a tax charge was reduced, from £1.25m to £1m. This led to many GPs seeing little benefit in continuing to pay into their fund, and NHS England heard anecdotal evidence GPs retired early to avoid the new rules.

The recent GP partnership review found tax charges are a common factor for GPs deciding to reduce their clinical commitment, retire early or opt-out of the NHS Pension scheme.

Readers' comments (22)

  • Someones put another gaping hole in the sinking Titanic another Tory cluster F***.

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  • The world has officially gone mad

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  • As usual one branch of government messes up another.
    No joined up thinking as usual.
    I am afraid we have a barely competent political class with little experience of the real world.
    I would not trust them to run a whelk stall

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  • David Banner

    This insanity could be so easily fixed. If raising the thresholds for annual and lifetime allowances are not politically possible, then at least allow doctors to limit their amount of pensionable pay, instead of the “all or nothing” idiocy we have at present.
    But the Treasury thought they were being so clever. After the 2004 contract had (in their opinion) given GPs a far too generous pension deal, they devised these tax thresholds to claw back as much as possible, but without thinking through the consequences. Now we have doctors slashing their hours in a recruitment crisis......utter madness and (sadly) totally predictable.

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  • @Turn out the lights
    Yes indeed!
    I think the seeds for this were sown by Osborne the towel folding genius who is now editor at the London Evening standard (among several other jobs that he is not fit for)

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  • At 36, I reduced to 7 sessions to minimise this effect. Working 8 sessions, I was paying a month's drawings a year in "penalty tax" on a pension I may or may not get in 30+yrs. Bonkers.

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  • I've just opted out aged 34 for this reason. VCTs are looking attractive...

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  • Thanks Pointless for those mumblers (see earlier) . So it's confirmed. Seven sessions is now the full time commitment.

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  • Sorry numbers not mumblers :-)

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  • a partial pension will not help this issue if your annual allowance has been reduced. The other insanity is that the annual allowance is not what you put in, but how much your fund increases. If inflation has been high, it increases more. therefore GPs a penalised with higher tax bills when inflation runs high, which they have no control over! The ONLY answer is to increase the annual allowance back up to a high level and accept people should be incentivised to SAVE for retirement!!

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  • All you anti-Tories think Labour would do any better? Borrow more and bankrupt the country further? Mortgage your children's and their children's futures? Think again. I'm not pro-Tory, as many would like to paint me as. Simply because, the Tory party are not really 'conservative' at all. Rather than asking incompetent fools to take more of your money and hoping they would spend it wisely, my contention is rather to take the power back from the state, and get the fools to butt out of running as many things as possible.

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  • I think you can leave the pension for several months a year to reduce your risk with the annual allowance. Seem a stupid solution and I think the government should scrap the annual allowance concept. It is a reason for not taking a pay rise in a better job or for working more. All part of austerity and making sure the bankers and mega-rich are looked after. Come the revolution I know who will the be first against the wall.

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  • Moral of the stories are: You get punished for working and helping. Look at this and the Bawa Garbage case. Therefore I am not doing more. People are going out of clinical medicine into regulatory bodies etc. Sad.

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  • Disaster looming.Reason I retired early as no other option offered currently.

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  • what we should ask is how as a profession we have lost our self respect to be treated like this!

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  • The pension is a Ponzi scheme. The NHS Pension scheme was very generous because the original GPs were overweight, male, smokers and drinkers. Most died within a year or two of retirement. Modern GPs are healthier and most live long after retirement. The money we put aside into our pension pot doesn't exist. Pensions are paid by the taxes of the younger workers--hence it is in effect a Ponzi scheme.

    Get out of the pension scheme and put some money under the bed each month.

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  • Vinci Ho

    ‘.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. However, there has been no reported movement on this issue.‘’

    You see , the problem with Robocop is , he does not spend all the effort and time on being a health secretary. Apart from playing with his smartphone , I presume, he would rather like to be the ‘superhero’ to defend his Cabinet colleagues instantaneously . Remember, he was the first one rushing to defend Auntie May in front of the media outside House of Commons , immediately after her miserable defeat for passing her Brexit deal . Yesterday, he bravely defended his absent Transport Secretary colleague ‘failing Grayling’ on the £300 million payout to Eurotunnel and related issues for Brexit , in House of Commons .
    Of course ,we all know that he would ‘tirelessly’ defend GP at Hand .
    One would wonder when the ‘superhero’ would start real effort to defend and protect general practitioners as he claimed so far ??

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  • Hi all, can anyone quantify the amounts for the e annual allowance relating to pension contributions, i need to do some sums.

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  • |importance of being sincere | Locum GP|04 Mar 2019 9:49am
    what we should ask is how as a profession we have lost our self respect to be treated like this!

    Easy. Its the usual socialist moral blackmail of 'helping the working class', that makes it difficult to point out the truth. And the truth, as backed by history and evidence, is that 'excessive' socialist policies harm everyone, including the working class. Our leaders don't have the balls to stand up and point this out, for fear of losing votes/power. And our education system is indoctrinating our young with lies that perpetuate this. The good fight is worth fighting for though, as the alternative is despair. And the truth will always stand up to scrutiny.

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  • No hope for lost cause. Plan cut down sessions, remove OOH and anti-social hours for better work life balance. No point stating the obvious in sinking ship. Some guys think they can cleverly increase taxes without any reaction. They need to check in many such policies in past for tax collection fell flat as people adjusted to the changes.

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  • I predict lots of young doctors moving abroad for a better pay and working conditions, older doctors taking pensions earlier to avoid tax charges, having been brought up as a working class kid on socialist policies then medical training under tory cuts its all bollocks - we need a new set of politics to sort this out. can we strike now or do I have to wait for yet more pain to be inflicted before the rest of you see the lightbulb popping. there really is not much left to lose

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  • I'm 44 and opted out of the pension scheme this year. I may opt back in in a couple of years. Scheme pays not a great option as it will seriously impact on pension drawings in the future. I wrote to the chancellor about this issue. One of his team replied and essentially observed that as the people affected by the Annual Allowance were in the top 1% of pension contributors it was unlikely the policy would change. I can't really see how a special case could be made for exempting Drs as all other high earners would be in uproar.

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