Pensions taxation leading to doctors retiring earlier

Forty-five per cent of doctors have decided to retire earlier than planned, with 86 per cent of those citing pensions taxation as their reason why, according to the Royal College of Physicians (RCP).

A joint survey of 2,800 doctors nearing retirement age, undertaken by RCP, the Royal College of Physicians of Edinburgh and the Royal College of Physicians and Surgeons of Glasgow showed that in the last two years, 38 per cent of clinicians aged 50-65 said they have had an annual pension allowance tax charge due to exceeding their pension threshold.

This has led to senior clinicians avoiding extra paid work (62 per cent), reducing the number of programmed activites they work (25 per cent), stepping down from a leadership role of other extra remuneration (22 per cent).

The RCP cited an example of a deputy medical director that received a £85,000 tax charge. They said that they were able to pay with scheme pay otherwise they would have had to sell their house.

Commenting, RCP president Professor Andrew Goddard said: “These findings further demonstrate the need to urgently reform the pensions system in this current tax year in order to prevent additional pressure on the NHS.

"We know that the NHS will remain heavily reliant on this population of consultants, and if treated well they still have a lot to offer the NHS with 70 per cent reporting that they would be willing to come back to work after retiring.

“We simply cannot wait until the next tax year for a solution, every week the issue remains more hard-working doctors will reduce their hours, driving up waiting times for patients and driving down staff morale. It is now vitally important that clinicians are engaged with and supportive of any proposed solutions, so we will be responding to the consultation in due course.”

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