The refusal of senior doctors to take on additional shifts has led to waiting lists for routine surgery increasing by as much as 50% in some parts of the country
Higher earning clinicians have been turning down extra shifts as the money they earn risks them breaching pension saving allowances and getting unexpected tax bills.
The chief executives of some hospital trusts are reporting that some consultants who could previously have been relied upon to work on a Saturday or Sunday are now refusing to work at weekends altogether.
The problems have arisen following the introduction of the tapered pension allowance for high earning professionals in April 2016. This reduces the amount of tax relief they are able to get on their pension contributions.
The British Medical Association has warned the government for some time that if it does not tackle the problem senior clinicians would start to reduce their working hours or quit the NHS altogether.
The government is currently consulting on changes to the NHS pension. A new 50:50 option would enable affected doctors to reduce their pension contributions by 50% in return for a 50% reduction to their pension’s growth.
The idea is that this would make it easier for doctors to take on additional shifts, fill rota gaps and take on important supervisory roles. However, critics of the proposal say it won’t work.
Gary Smith, chartered financial planner at Tilney says: “The Chancellor Philip Hammond has ruled out scrapping the tapered pension allowance, but has proposed making the NHS scheme more flexible, with a mooted 50:50 arrangement that would allow members to reduce the amount put in their pension to avoid the tax charges.
“However, our analysis shows that while such a move might help address the issue of tax charges, it would leave senior NHS staff no better off than if they incurred the tax charges, so is little more than a mirage.
“The likelihood of a new Chancellor being appointed following the imminent change of Prime Minister might be an opportunity for a more fundamental rethink on the tapered allowance – introduced by George Osborne – which is widely perceived as unfair. While controlling the cost of pension tax relief is understandable for government, there are much simpler solutions, like a lower annual allowance or a flat rate of relief for all.”
Steve Webb, director of policy at Royal London takes a similar view. “‘It has to be a priority for the new Chancellor to tackle this issue. No-one objects to limiting pension tax relief for higher earners, but the way it is being done is absurdly complex and is having unintended consequences for the NHS.
"Tweaking the NHS pension scheme would simply be a sticking plaster response. The ‘tapered’ annual allowance needs to be abolished and replaced with a simpler across-the-board limit on pension contributions."
Sadly by the time HMG addresses this problem, assuming that it does so effectively, it is likely to be too late to solve the staffing crisis in the NHS. Once senior doctors discover that they can a much better quality of life by reducing their workloads and do so with a very small loss of income and possibly even with a larger pension they will be unlikely to go back to full time working. The loss of these experienced doctors will be devastating for the NHS and will take many years and a lot of money to reverse.
This problem was created by Government policy. The unexpected consequences were probably foreseen by those responsible. I hope they are ashamed of the effect on patients who will be denied treatment as a result of this policy.
Pensioners blamed for long nhs wait.
What about the drunks, , drug addicts?
We need to pay 1% extra tax to be spent entirely on emergency services,education and the nhs.
But can we trust the Government?
Scotland increased tax why not us?
Simple, rather than take care of the voters the Government want to stay in power.
But most of us know that increase in tax is better than borrowing our way out of trouble.
How about MPs being subject to the same allowances? They notably exclude themselves from anything that affects others.
How about the affected doctors just stopping pension provision after a certain level of accrual? After all the allowances and caps are such as would provide a decent pension for most. They can still work longer hours if they want more money to take home - they should maybe not be taxed at their highest level on such additional work. It would still be income...