Pensions cap is set to trigger exodus of doctors from NHS
CHANGES to the amount highearners can save into their pensions will spark an exodus of doctors, dentists and consultants from the NHS, experts have warned.
Experienced and well- paid medics who have already reached the £ 1million pension pot limit will not see the point of working any longer and will rush for early retirement. This drain of medical skills is an “unintended consequence” of recent Government changes, says specialist accountants Bishop Fleming.
“Recent changes to pension rules mean that the NHS is likely to lose any doctor or dentist aged more than 55,” said Tim Godfrey, head of the group’s healthcare team.
“The reduction of the maximum pension pot is a big issue for NHS doctors and for NHS dentists. Many long- serving doctors and dentists aged in their 50s will have reached that ceiling and will now be studying whether it is worth their while to continue working.
“I understand why the Government introduced these new pension rules but everything in life can have unintended consequences. On this occasion, at a time when politicians are on the General Election campaign trail, the danger is that the NHS will see an exit of much- needed experienced GPs, consultants and dentists.”
However campaigners criticised any move towards a rush to retirement. Jonathan Isaby, chief executive of the TaxPayers’ Alliance, said: “Let’s not forget that it is taxpayers who have funded the training for these individuals, and have kept them in paid employment for decades.
“Public sector pensions remain far more lucrative than most people in the private sector could even dream of and the decision to cap them remains a correct one. We are £ 90billion in the red thanks to years of public sector overspending and we have to make amends for those mistakes.”
In his March Budget, Chancellor George Osborne announced that from April 6 next year the Lifetime Allowance, which relates to the maximum sum people can have in their pension pot and still qualify for tax relief, will be cut from £ 1.25million to £ 1million,
Less than four per cent of pension savers approaching retirement will be affected and the cut will save
LIVING WAGE FARCE
AT LEAST two Labour councils are paying staff less than the living wage, while their chief executives earn about 10 times as much.
Despite Ed Miliband’s demands for better pay, Bury and Wigan councils pay a minimum hourly rate below £ 7.85 (£ 16,328 a year).
And according to the councils’ websites Wigan chief executive Donna Hall rakes in £ 165,000 while Bury council’s interim chief executive Mike Owen is on £ 152,286.
In response, a Bury council spokesman said: “It is a clear aspiration that we should pay the living wage.” While a Wigan council spokesman said: “We have a happy workforce.” £ 600million, Mr Osborne said. But some pension experts believe it is a step in the wrong direction.
Steven Cameron of Aegon said: “It seems a huge sum but with improvements in health and life expectancy, people who retire at 60 may need their pension to cover 30 years or more. If you want it to continue to your partner and rise with inflation, £ 1million will buy you less than £ 30,000 a year. Many aspire to more than that.”