Almost two thirds (63 per cent) of Scottish doctors in the NHS are facing large pensions tax bills, research by the British Medical Association (BMA) Scotland has revealed.
The survey, which questioned over 350 doctors on the impact of the pension tax charges, found that a further 21 per cent are “worried” they are due a tax bill, with the average tax bill reported by doctors totaling £18,500.
The charges, relating to the way annual and lifetime allowances are calculated, have resulted in more than half of doctors across all branches actively reducing or planning to reduce their workload, in order to avoid the tax threshold, according to the BMA.
BMA Scotland consultant committee chair, Simon Barker, said: “It is hard to overstate the seriousness of this situation and its implications not just for consultants, but for NHS hospital services and our patients who rely on them.
“No-one argues that doctors shouldn’t pay their way, or that the NHS pension scheme hasn’t previously been one of the key attractions of the job.
“However, the inherent unfairness of unpredictable additional taxation levied now, yet for a future benefit that may never be realised, is something that anyone can recognise, except the UK Treasury apparently.”
The survey found that nearly a quarter of the doctors who responded were being forced to consider an early retirement, while 87.4 per cent of doctors believe it will have a “significant or very significant” impact on NHS services.
Almost half of respondents said they have given up or are considering giving up overtime which would reduce waiting lists, while four in 10 were considering reducing their workload.
Last week, the BMA warned that the NHS was is on the cusp of a “major workforce crisis” if the government fails to address the ongoing pensions crisis in a letter to Prime Minister Theresa May.
The government is set to launch a consultation in order to deliver “new pensions flexibility” for senior clinicians through a possible 50:50 solution, which allows employees to reduce their pension contributions to 50 per cent, while maintaining employer contributions at 100 per cent.
However, the BMA and others have come out criticising the new proposals which would not provide flexibility urgently needed.
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 Chancellor Philip Hammond ruled this out, describing it as necessary “to create a fair system and protect finances”.
Barker added: “We’ve been consistently raising this with politicians as we seek a solution. While pensions taxation is reserved to Westminster, we are pleased that Jeane Freeman has taken time to listen to doctors’ concerns, has written to the Treasury and has set up a joint group with the BMA to consider what might be done in Scotland.”
Recent Stories