Pensions raid sparks full-blown crisis
The Government’s pensions crackdown was already a huge issue for general practice, but this week it has escalated into full-blown crisis. GPs were so shocked by plans unveiled by Lord Hutton to extend their retirement age to 65 and beyond that moves to ramp up contributions had been overshadowed. Not any more.
The Government's pensions crackdown was already a huge issue for general practice, but this week it has escalated into full-blown crisis. GPs were so shocked by plans unveiled by Lord Hutton to extend their retirement age to 65 and beyond that moves to ramp up contributions had been overshadowed. Not any more.
In this issue, the full financial impact of Treasury plans to squeeze far more from members of public-sector pension schemes is set out in brutal detail by respected accountancy firm Dodd & Co. The figures are so bad, at first glance they look like they must be wrong.
If the Treasury does double GP pension contributions by 2014/15, as documents seen by the BMA suggest, then Dodd & Co forecasts an extraordinary 19% cut in GPs' take-home pay.
A GP on £110,000 would receive just £33,550 after deductions – 70% of pay would be sucked up by tax, national insurance or contributions.
Even if contributions rose by just 3% – very much a best-case scenario given the apparent intention to weight the average 3.2% rise heavily against higher earners – take-home pay would fall by 8%.
But that all assumes GPs will be prepared to accept such a radical reshaping of their incomes. Many will not.
Accountants are already warning some GPs are considering freezing their NHS pensions or withdrawing immediately from the NHS Pension Scheme, and putting their money somewhere else where it will reap a better reward.
There is a real risk that the profession will desert the scheme en masse, leaving it teetering, financially shattered and ready to collapse.
Nor is the pension scheme all that faces desertion. Dr Peter Swinyard, chair of the Family Doctor Association, is calling for GPs to submit undated letters of resignation to the BMA. If GPs are faced with retiring at 65 or later, and with cuts in pay of a fifth, that really could spark the exodus from the NHS that has occasionally been threatened but never seriously acted upon.
No-one wants to see that. There has to be a way of making the Government see sense. At Pulse, we will continue to do our bit to publicise the views of GPs, and make crystal clear to ministers the size of the opposition they face.
We are booking a date at Downing Street for June, at which time we will present our petition to the Prime Minister's office. We currently have the support of 1,216 GPs for our petition, opposing the rise in retirement age and demanding any increase in contributions is subject to consultation and agreed with the BMA.
But the more names we can get, the stronger our case must be – we must aim for at least 2,000.
And if the Government won't listen? The BMA plans to poll GPs on the actions they are prepared to take.
Pulse's own survey last month found strong backing for a legal challenge, support for limited industrial action, and many GPs prepared to do what the Department of Health most dreads – boycott commissioning in protest.
To add your name and practice location, visit www.pulsetoday.co.uk/noto655 or email firstname.lastname@example.org
Click here to sign our petition No to 65 Pulse petition: No to 65
Sign our online petition to put pressure on the Department of Health and the Treasury to rethink their plans to make GPs work longer.
We believe the Government must act to drop any plans to compulsorily increase GPs' retirement age from 60 to 65, and must fully consult the profession over any attempt to make savings from any part of the NHS pension.