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Four in 10 GPs have reduced shifts over pension tax penalties, reveals BMA

Almost half of GPs have cut their hours over fears of being hit by pension taxes, a BMA poll has revealed.

The survey of 6,170 GPs and hospital consultants found that 42% of GPs have reduced their shifts to avoid extra pension charges while 34% are planning to do so in the future. 

It follows a letter sent to new Prime Minister Boris Johnson, with the BMA urging him to take action on the ‘punitive’ pension taxation system. 

The BMA said the findings reveal the extent of the pension issue and its impact on both the profession and patients. 

It previously warned that GPs were retiring early or cutting their hours of work – some in their 30s – to avoid tax charges.

In its latest survey, the BMA examined the impact pension tax charges are having on GPs in England, Wales and Northern Ireland. It found that 42% of GPs have reduced their hours in addition to 34% who plan to follow suit.

This compared to 30% and 40% of consultants respectively.

Earlier this year, health secretary Matt Hancock announced plans for a flexible pension system – which would allow GPs to cut their pension contributions by half, thereby avoiding tax charges. However, GP leaders and accountants have warned this solution is not enough to solve the problems.

The BMA said it will lead to more doctors, including GPs, retiring early. Instead, it urged the Government to scrap the annual allowance and tapered annual allowance and reform the lifetime allowance to ‘stabilise the workforce’.

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

BMA GP Committee chair Dr Richard Vautrey said: ‘These results show the extent to which GPs are being forced to reduce their hours or indeed leave the profession altogether because of pension taxes.

‘With patient lists growing and the numbers of GPs falling, swift and decisive action is needed from the Government to end this shambolic situation and to limit the damage that a punitive pensions taxation system is inflicting on doctors, their patients and across the NHS as a whole.’

Echoing his comment, BMA consultants committee chair Dr Rob Harwood said: ‘We are now seeing, in the cold hard light of day, the impact that these appalling taxes are having on doctors.

‘The majority of consultants are contracted to work an average of 46 hours per week and we know that, in order to avoid tax bills of several thousands of pounds, many have given up, or want to give up, 10 hours a week. Across the country, that represents several hundred thousand hours of patient time lost. We are being put in an intolerable position because of these taxes and our patients are suffering because of it.’

He added: ‘The BMA has repeatedly warned the Government that this would happen. These results show that we were right. We don’t want to be. What we want are the annual allowances and tapering annual allowances scrapped so we can get on with caring for patients. High interest rates on loan schemes lead many doctors to consider the possibility of re-mortgaging or selling our homes.’

A recent Pulse investigation found over half of GPs are planning to stop practising before retirement age because of issues regarding pensions.