Top doctors are told to cut their hours to avoid pensions trap
DOCTORS have been advised to cut their hours so they get a bigger pension – triggering fears of a new NHS staffing crisis with ‘unimaginable consequences’.
The British Medical Association has issued guidance for NHS consultants explaining how reducing their hours could lead to an increased pension under new tax rules.
Critics said the way the tax system incentivises doctors to work less was ‘complete lunacy’ and will increase staff shortages and waiting times.
Senior doctors are being hit by a rule that has cut the taxfree pension allowance of those earning more than £110,000 a year from £40,000 to £10,000.
If a doctor earns more than £110,000 any pension contribution they make above the £10,000 cap triggers a tax charge of 55 per cent. This means NHS staff who accidentally breach the cap can be hit with bills of tens of thousands of pounds.
Doctors say that because they often work overtime it is more difficult for them to keep track of how close they are to breaking the £110,000 threshold. They also cannot put their overtime income towards their pension – so by working extra hours they can bust their pension tax allowance, without making any savings for retirement.
The BMA said consultants had no option but to substantially reduce their hours or take early retirement, adding that this would ‘inevitably’ have an impact on patients.
They have now posted guidelines online showing how con
‘Unimaginable consequences’
sultants can benefit from a larger pension if they cut their hours. One case study in the video slideshow reveals how a 40-year- old consultant could increase their annual pension by more than £5,000 if they halved their weekly workload. Consultants earn a basic salary of up to £105,042 a year, but hospitals rely on them working extra shifts to keep the NHS running.
Tony Goldstone, a consultant radiologist at Hull and East Yorkshire Hospitals, told the Health Service Journal: ‘This could trigger a workforce crisis of previously unseen proportions and with unimaginable consequences.’
A BMA survey of 4,000 consultants found 30 per cent planned to cut back hours and 60 per cent planned to retire early because of the issue.
Dr Rob Harwood of the BMA said: ‘Without urgent change to current tax and pensions rules, the NHS will see a significant workforce crisis as doctors act to reduce the work they do to avoid these punitive charges.’
Danny Mortimer of NHS Employers, which acts on behalf of the Government, said: ‘Any suggestion that skilled senior clinicians are looking to reduce or end their NHS commitments should be cause for alarm.’
John Kell of the Patients Association said: ‘ The Treasury must sort this out as a matter of urgency.’
The Health Department said it recognised the implications of the annual allowance and its impact on NHS high earners and said it was talking to the Treasury about the issue.