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Pensions' tax devastating the profession, finds survey

Small business accountancy
MONEY MATTERS: The average tax bill reported by affected doctors was £18,500

Punitive changes to pension arrangements are having a devastating effect on doctors and health services, a BMA Scotland survey reveals.

More than 350 doctors responded to the survey during a two-week period, and the interim results make grim reading for the profession, NHS, and patients.

Of the doctors who took part, almost two thirds (63 per cent) had received a large pension tax bill, and a further 21 per cent were worried that they may be due to receive a bill. The average tax bill reported by affected doctors was £18,500.

More than half the respondents said they had either already reduced their workload or were planning to, in order to stop their earnings going above the relevant pension tax thresholds.

Nearly nine in 10 (87 per cent) of doctors said this would have a significant effect on NHS services, such as waiting lists or emergency care; more than a quarter said the effect would be great enough to lead to the collapse of services.

Nearly a quarter of respondents said they were considering early retirement as a result of the pension changes – and many were in no doubt that the loss of senior doctors would have a negative impact on the service. Several warned of longer waiting times, and one said the expected exodus would be ‘disastrous to services that need these senior people to manage’.


Work reduction

BMA Scotland consultants committee chair Simon Barker said it was hard to overstate the seriousness of this situation and its implications.

‘Make no mistake – our consultant workforce is already stretched to its limit, with high levels of vacancies. Added to this we are now seeing doctors across the profession cutting down their work, due to a completely justified fear that they will be hit with huge pension tax bills that are extremely hard to foresee.

‘In worst-case scenarios, a substantial number of doctors are telling us they are going to retire or are at least contemplating it.

‘No one argues that doctors shouldn’t pay their way, or that the NHS pension scheme hasn’t previously been one of the key attractions of the job.

‘However, the inherent unfairness of unpredictable additional taxation levied now, yet for a future benefit that may never be realised, is something that anyone can recognise, except the UK Treasury apparently.’


Recruitment suffers

BMA Scotland GPs committee chair Andrew Buist (pictured below) called for urgent action.

‘We all know the deep seated problems that exist around recruitment and retention of GPs and there can be no doubt this is making the position substantially worse.

‘It is incredibly frustrating, that at a time when we need to focus entirely on implementing the new GP contract, issues like this should threaten to undermine the progress we are making.’

The Scottish health secretary Jeane Freeman has written to the Treasury and had set up a group with the BMA to consider what might be done in Scotland. While pension taxation is reserved to Westminster, BMA Scotland is keen to ensure that every potential way of mitigating its impact at the Scottish-level is fully explored.

Mr Barker added: ‘We desperately need a long-term solution from Westminster – such as ending the taper and revising the allowances and thresholds – but we also need swift progress in Scotland to put mitigations in place as the Treasury continues to procrastinate. With NHS services under serious threat – only prompt, serious and practical action will do.’

Find out more about the BMA's work on pensions


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