This is not a pensions ‘row’
This morning, according to the BBC, ministers have reacted to the pensions ‘row’ with new plans to make NHS pensions more flexible.
But the Government has for a while acknowledged that the current situation is ridiculous. Under current rules, some doctors are losing money in the immediate time by working, with the only benefit being an abstract increase in their pensions decades later.
This is not a case of greedy doctors with their huge pensions. GPs aren’t proactively looking to maximise their stocks and shares in a bid to increase their wealth. The majority of GPs affected are simply doing their work and finding themselves trapped towards the end of the year, because of the prospect of a whopping tax bill they couldn’t have planned for.
The Government’s changes might help, but the time has come to ask whether we should abolish taxes on any pensions earnings altogether
From the general public’s point of view, there is no doubt that the NHS pension is good in comparison with private sector pensions. But this kind of pension used to be standard. The problem has come through the private sector reducing their employees’ benefits. The fact that the NHS has retained the benefits it promised should not see doctors punished.
It would be politically dangerous to cut taxes for higher earners – which doctors are – in the current environment. But the current rules represent an immediate tax on future earnings – and on those who plan sensibly. The Government’s changes might help, but the time has come to ask whether we should abolish taxes on any pensions earnings altogether.
Jaimie Kaffash is editor of Pulse. Follow him on Twitter @jkaffash or email him at email@example.com