The government will publish a consultation to deliver “new pension flexibility” for senior clinicians in the NHS at the end of June, it has confirmed.

In an Interim NHS People Plan published today, 3 June, the government said that it was “listening to these concerns” around the current pension taxation arrangements which is causing employees to not take on extra work or exit the pension scheme.

As a possible solution, the Department for Health and Social Care is looking at giving senior clinicians a 50:50 option, which allows employees to reduce their pension contributions to 50 per cent, while maintaining employer contributions at 100 per cent.

Last week, the British Medical Association (BMA) said that the approach would not provide the flexibility urgently needed, but did welcome the Secretary of State for Health and Social Care, Matt Hancock’s, willingness to discuss other options with the union.

The report said: “The government is listening to these concerns and will bring forward a consultation on a new pension flexibility for senior clinicians. The proposal would give senior clinicians the option to halve the rate at which their NHS pension grows in exchange for halving their contributions to the scheme.

“We will work with the government to seek changes that encourage individuals to stay within the NHS and ensure the right incentives are in place for them to maximise their contribution to patient care.”

Since the introduction of the annual allowance taper in April 2016, and the lowering of the tax relief threshold from £1.25m to £1m, many consultants are penalised for continuing to pay into their pension fund.

Furthermore, many NHS employees are not in a position to regulate their pension contribution, meaning they will not know until after the event if they have exceeded the savings limit.

Calls have been growing to scrap the taper, which is thought to bring in £6bn of revenue for the government, however last week the Chancellor Philip Hammond ruled this out, describing it as necessary “to create a fair system and protect finances”.

Responding the latest plan, BMA chair of council, Doctor Chaand Nagpaul, welcomed an acknowledgment of the problem, but reiterated its stance on the 50:50 solution.

“The BMA has already outlined a number of temporary mitigations which, if swiftly applied, would stop experienced doctors leaving the NHS or reducing the hours of patient care they provide and we are giving a cautious welcome to the fact this is a step in the right direction for reform.

“We have modelled the proposed 50:50 scheme and it is clear that by itself this proposal will not remove the disincentive for doctors to reduce their working hours. It needs to be part of wider reform.”

“Given the complexities of the NHS pension scheme and the fact that individual circumstances vary, it is essential that any flexibility offers far more than simply paying half of the employee’s contribution in order for half the accrual of pension.

“In addition, there needs to be the ability to recycle the employer’s pension contribution on the percentage of pay that is no longer pensionable. This is commonplace in other sectors with the Chancellor describing such payments as ‘regular’.”

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