Today (7 August) Matt Hancock proposes an NHS pension change, via a public consultation over rules governing the amount that senior doctors put into their pension
The government wants to change pension rules for top doctors, surgeons and other high-earning clinicians to allow them to take on extra shifts and treat more patients without losing out financially.
The Department of Health and Social Care (DHSC) will shortly open a new consultation asking people what they think about the set of proposals, which includes giving senior clinicians full flexibility over the amount they put into their pension pots.
This replaces the 50:50 proposal put forward for consultation in July.
Starting from next financial year, the new rules would allow senior clinicians to set the exact level of pension accrual at the start of each year.
For example 30% contributions for a 30% accrual rate, or any other percentage in 10% increments depending on their financial situation. This would give them room to take on additional work without breaching their annual allowance and facing tax charges.
Employers would then have the option to recycle their unused contribution back into the clinician’s salary.
The proposals follow the commitment made in the NHS People Plan to deliver a fairer and more flexible approach to the NHS Pension Scheme for senior clinicians.
The NHS Pension Scheme is recognised as one of the most generous in both the private and public sector. But the tapered annual allowance means some clinicians can face tax charges. Around a third of NHS consultants and GP practice partners have earnings from the NHS that could potentially lead to them being affected by the tapered annual allowance.
Alongside the proposals for full flexibility, HM Treasury will review how the tapered annual allowance supports the delivery of public services such as the NHS. HM Treasury will continue to engage with the NHS, the British Medical Association (BMA) and other stakeholders as part of this process.
What would change?
It would mean clinicians can freely take on additional shifts to reduce waiting lists, fill rota gaps or take on further supervisory responsibilities.
A proposal known as a 50:50 option would allow clinicians to halve their pension contributions in exchange for halving the rate of pension growth. But this would not cover the pension situations of managers, only senior clinicians.
Senior doctors have said that pension tax charges are discouraging them from taking extra work to support patients and causing them to question whether to remain in the NHS Pension Scheme.
Health and Social Care Secretary, Matt Hancock, said:
“NHS doctors do extraordinary, life-saving work every day, and they should not have to worry about the tax impacts if they choose to go the extra mile by taking on additional work to help patients.
“These comprehensive proposals will give doctors the pension flexibilities they have called for and need to make sure they are rewarded for extra work. We are taking immediate action and I hope these flexibilities will encourage our top NHS staff to fulfil the dedication of their mission: to care for their fellow citizens in time of need.”
What do the NHS think?
Danny Mortimer, deputy chief executive of the NHS Confederation, which represents organisations across the healthcare system, said:
“Last week the NHS Confederation called for the tapered Annual Allowance to be scrapped to address the NHS pensions crisis and so our members will welcome the decision to review it.
“We support the introduction of greater flexibilities to allow members of the NHS Pension Scheme to control the value of their pension growth and we believe this will have a positive impact on NHS service capacity and patient care.
“We await the full details of the new proposals with interest and will continue to engage with employers to understand and represent their views in our response to the consultation. In particular, NHS Employers will continue to make the case for scheme flexibilities for the benefit of all scheme members, not just senior clinicians.
“NHS Employers (which is part of the NHS Confederation) will ensure that employers receive clear guidance on the approaches proposed by the government, and will represent their views in the joint work with government and medical trade union representatives regarding the reform of tax policy.”