Writing for Pulse, health minister Will Quince says changes brought in around pensions taxation will benefit tens of thousands of senior clinicians
The nation highly values the hard work of GP teams and NHS staff, particularly throughout the pandemic. Thanks to them we’re making good progress to achieve the Prime Minister’s ambition to cut waiting lists, despite ongoing pressures, and ensuring patients can see their GP as quickly as possible.
As part of my role as Health Minister I regularly speak to clinicians and industry representatives and I have listened to their concerns around pensions.
We need a system where our most experienced clinicians don’t feel they have to reduce their workload or take early retirement due to the impact of pension taxation.
That’s why we’ve taken decisive action to change the rules and announced reforms at Budget to increase the annual tax-free pension allowance from £40,000 to £60,000, and remove the lifetime allowance charge.
These positive changes came into force last week (on Thursday 6 April) and will ensure doctors are not disincentivised from remaining in their NHS roles or taking on extra hours. This means more expertise will be retained so we can continue treating patients and helping to cut waiting lists.
We estimate around 22,000 senior NHS clinicians could exceed the previous £40,000 annual allowance in 2023/24. Increasing the annual threshold means more clinicians will be incentivised to stay in the workforce and work as many hours as they want.
Estimates also show around 31,000 clinicians had reached at least 75% of the £1.073 million lifetime allowance. This means there will no longer be a limit on the amount doctors can contribute to their pension during their working career, encouraging them to continue working for longer and paying into the Scheme.
These reforms will therefore be a significant boost for thousands of staff – the chair of the BMA’s Pension Committee has described it as potentially transformative for the NHS.
Similarly, the NHS Pension Scheme is one of the most generous and comprehensive in the UK – but it’s not working as it should for everyone.
We’ve therefore introduced changes to make retirement more flexible and support staff to remain in work for longer. This will help boost the workforce by retaining more senior clinicians as the NHS continues to tackle the backlogs.
The changes, which also come into force this week, will allow retired and partially retired staff to return to work or increase their working hours without having payments to their pension reduced or suspended. We’ve also fixed the unintended impacts of inflation so senior clinicians are not taxed more than is necessary and ensured staff can continue to access the scheme when working in Primary Care Networks.
All in all, these changes will offer NHS staff and senior clinicians more flexibility and control over how and when they work, putting decisions about their careers back in their hands. As a result, experienced, senior staff can remain in work for longer if they choose, ultimately benefiting patients by ensuring their expertise remains in the NHS so we can continue to deliver world-class healthcare.
We’re focussed on making the NHS the best place to work and this is just the first step. The NHS will soon publish a workforce plan to recruit and retain more staff, including in primary care. This is alongside a record funding boost of up to £14.1 billion for health and social care over the next two years to help get services back on track following the pandemic and ensure the NHS continues to be there for all of us.