‘Strong’ case for partial pensions in NHS, report finds

Urgent measures including offering partial pensions must be implemented to stop senior NHS staff from leaving the health service, a joint report from leading industry bodies had said.

The report Closing the gap: Key areas for action on the health and care workforce published today, 21 March, said that pensions was a key element to the retention of staff towards the end of their careers, a point at which they can provide a “huge amount of experience and expertise”.

The joint report from Nuffield Trust, Health Foundation and The King’s Fund said that recent changes to the annual and lifetime allowances mean that many senior medical staff are now very likely to exceed tax thresholds.

As a result, workers are deciding to either leave the NHS Pension Scheme or retire early.

The report stated: “HM Treasury, working with the Department for Health and Social Care, could do more to provide clarity in this complex policy area and could investigate ways in which more flexibility could be introduced in the NHS pension scheme.

“In the most recent GP contract, there is a strong recommendation that the government should create a new partial pension option for the NHS, similar to that available in the local government pension scheme.”

According to the report, the number of GPs who have taken early retirement has risen from 32 per cent to 62 per cent since 2011/12. The body said it was “concerned that changes to the ways in which benefits accrued as part of the NHS pension scheme are taxed may be having some impact”.

Furthermore, it found that membership of the NHS Pension Scheme for doctors have fallen by 1.4 per cent between October 2011 and June 2018, “potentially due to the impact of pension tax allowances”.

Commenting on the findings, Quilter head of retirement policy, Jon Greer, said: “Pension taxation is never popular, but this is not about politicians winning over older voters, it is about the risk of damaging a critical UK institution – the one that ensures the health and wellbeing of the nation. If that is not enough to promote change, then nothing will be.

Greer added that the idea of partial pension option for the NHS is a sensible one, along with simplification of the tax system.

In February, the NHS and the British Medical Association (BMA) asked the government to consider partial pensions, which would give GPs the option to half their pension contributions in a five-year framework for GP contract reform.

Last week, the BMA revealed that it will help doctors pursue legal action; its solicitors have written to the Health Secretary, Matt Hancock, warning him of the intention to take legal action.

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