Hospital doctors may see bumper pay rises
Senior consultants who opt out of NHS pension scheme could be in line for generous salary increase
Hospital doctors who have maxed out their pensions could get an effective pay rise worth potentially thousands of pounds to keep working, under government plans to tackle the NHS staffing crisis. Thérèse Coffey, the Health Secretary, yesterday unveiled measures to retain NHS staff who are retiring early to avoid punitive tax bills on pension savings. Trusts will have to allow doctors at risk of breaching the lifetime pension savings allowance to take pension contributions in pay slips.
‘We are clear that these measures alone will not prevent doctors having to reduce their work or retire early as a result of punitive pension tax measures’
HOSPITAL doctors who have reached their pension savings limit could get an effective pay rise worth potentially thousands of pounds to keep working, under government plans to tackle the NHS staffing crisis.
Thérèse Coffey, the Health Secretary, yesterday unveiled a package of measures designed to retain top NHS staff who are retiring early to avoid punitive tax bills on pension savings.
As part of this, all NHS trusts will have to offer doctors at risk of breaching the lifetime pension savings allowance the chance to take their pension contributions as cash in their pay slip.
Doctors will have to opt out of the generous NHS pension scheme to avoid accruing any more benefits and therefore triggering enormous tax bills that can run up to the tens of thousands of pounds.
Rather than have a contribution worth 20.6 per cent of their salary paid towards a pension, they would instead get more cash in their pay, said John Ralfe, a pension consultant. Mr Ralfe said doctors could receive a pay increase of as much as 30 per cent of their wages – tens of thousands of pounds a year for senior consultants.
The British Medical Association (BMA) disputed this, however.
Doctors would also not have to pay 9.8 per cent of their own wages in pension contributions.
Some trusts already offer the deal, but the Department of Health and Social Care has announced all NHS trusts will have to do so by next year, to help “retain senior staff who have reached the lifetime allowance for tax-free pension saving”.
Madeleine Dowling, of pensions specialists Wesleyan, said the solution would not benefit all NHS staff.
“While this can help some doctors manage their risk of receiving expensive pension tax bills, it doesn’t – in its current form – help GPS,” she said.
Only staff who leave the NHS Pension Scheme can make use of so-called pension “recycling”.
Dr Vishal Sharma, of the British Medical Association, said the proposals were a “sticking plaster” for the pension crisis and would not halt the exodus of NHS staff.
Staff who stay in the NHS pension scheme are at risk of incurring huge tax bills if their pension savings exceed either the annual and lifetime allowances because of a pay rise or increase to their hours – meaning they are effectively paying to work.
“While the Government has made important first steps in addressing the problem today, we are clear that these measures alone will not prevent doctors having to reduce their work or retire early as a result of punitive pension tax charges,” Dr Sharma said.
Ms Coffey also used her “Our Plan for Patients” proposals to launch an international recruitment drive to hire more care workers in an effort to ease the bed blocking crisis.
The Health Secretary told MPS yesterday that the social care sector will be given £15 million to employ more workers from abroad.
Three fifths of patients medically fit to leave hospital last month remained there because they were unable to get care support at home.
Discharging patients to free up beds, which will in turn improve ambulance response times, is a “key challenge” for the NHS this winter, Ms Coffey said.
The recruitment fund is designed to help local areas apply for sponsorship visas, and provide accommodation and onboarding support for overseas staff.
The Government also pledged to address variation in dental care and tackle “dental deserts”, saying it will make it easier for dentists who trained overseas to practice in the NHS.
A £500million Adult Social Care Discharge Fund to help get patients out of hospital and into social care was also announced as part of Ms Coffey’s “Our Plan for Patients”.
The fund will act as a “down payment in the rebalancing of funding across health and social care,” she told MPS.
But trust leaders last night raised concerns about the source of the new funding and sought assurances it will not be taken from NHS budgets.
Matthew Taylor, chief executive of the NHS Confederation, said: “Although it comes at the eleventh hour, the government has rightly heeded our calls to reinstate central ‘discharge to assess’ funding this winter. However, NHS leaders will need rapid clarification on how much of this £500million fund is additional investment and how much is to be found from existing budgets.”
It is understood half of the £500million will come from the money NHS employers are no longer required to pay towards National Insurance contributions after the health and social care levy was axed.
The remainder is expected to come from under-spending, efficiencies and savings opportunities within the NHS.