East Renfrewshire MP welcomes Government decision to review ‘perverse’ NHS pensions tax rules

East Renfrewshire MP Paul Masterton has welcomed the U.K Government’s decision to review pensions tax rules that were forcing senior NHS clinical staff to turn down additional work, cut down shifts or retire early to avoid penalties of tens of thousands of pounds.

 

Complex pension rules introduced in 2016, known as the tapered annual allowance, change the rate at which tax relief is withdrawn on pension savings. However they had the unintended effect of seeing many doctors caught in a “pensions trap”, triggering marginal tax rates of over 100% and five figure tax charges.

 

Mr Masterton, who was a specialist pensions solicitor for 7 years prior to his election, was the first MP to raise the issue in Parliament earlier this year, and has worked closely with the British Medical Association and NHS Employers to campaign for the pensions rules to be changed. Mr Masterton highlighted that the rules were fuelling a retention crisis across the U.K, and raised examples of constituents working in the NHS who were reducing their hours to avoid the charges, stretching services further and meaning fewer patients being seen. Mr Masterton told MPs a consultant told him that in one hospital as many as 50 fewer patients were being seen in cancer clinics due to doctors having to turn down shifts to avoid massive penalties.

 

The Government has agreed to carry out a full review of the tapered annual allowance, alongside the launch of a new consultation on additional flexibilities for senior clinicians to decide how much they save into their pension.

East Renfrewshire MP, Paul Masterton commented:

“The consequences of the existing pensions rules were completely perverse, and effectively forcing NHS consultants to choose between paying to go to work, and patient care. We know these rules were causing senior medical staff to reduce their hours or leave the NHS altogether, causing capacity gaps, longer waiting times and increased risk of delayed diagnosis. 

 

Since first highlighting this problem in Parliament I’ve been inundated with the personal stories of consultants and GPs from across the U.K. and am delighted that the Government has now agreed to my call for a proper review of the system. We need to get this sorted quickly to let these consultants get back to work.”