Government considers 'partial pension' for GPs to halt workforce exodus

GPs could be offered 'partial pensions' to reduce their chance of hitting annual or lifetime allowance limits that have pushed doctors to stop working or quit the NHS pension scheme.

GP pension plan (Photo: iStock.com/SolStock)
GP pension plan (Photo: iStock.com/SolStock)

Plans put forward to the government by NHS England and the BMA as part of the landmark five-year GP contract deal agreed this week would halve the rate at which GPs' pensions build up by halving their contributions.

Slowing the growth of pension pots could help remove the incentive for GPs to stop work or leave the NHS pension scheme by delaying the point at which they hit annual allowance or lifetime allowance limits.

GPonline reported last week that numbers of GPs taking early retirement tripled over the past decade, with tighter tax limits pushing doctors to reduce work and ratcheting up pressure on the already-overstretched workforce.

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GPC chair Dr Richard Vautrey warned that limits on annual and lifetime pension contributions introduced over recent years had had 'a major impact on retention' of GPs - warning that the situation would 'only get worse' without urgent action to tackle the problem.

An NHS England document setting out details of the five-year GP contract agreement unveiled this week says: 'The annual allowance cap creates an incentive for GPs to either cut their time commitment to the NHS, or quit the NHS pension scheme altogether, thus leaving themselves and their families without coverage for ill-health retirement or death-in-service. This could be resolved by creating a new "partial pension".'

The document points to the local government pension scheme, which already has a 50% pension option - and says that the government has been asked 'to consider this for GPs'.

Under the local government pension scheme, a 50% option was set up to allow people struggling financially to halve their contributions temporarily. The mechanism can also help high earners avoid hitting tax thresholds, however.

A local government pension scheme (LGPS) factsheet says: 'If you wish to slow down your pension build up to avoid or mitigate an annual allowance tax charge the 50/50 section of the LGPS allows you to pay half your normal contributions and build up half your normal pension, whilst still retaining full life and ill health cover.'

The BMA and NHS England agreed to submit the joint proposal as part of the five-year contract agreement, which sets out plans for all practices in England to join networks, confirms the launch of a state-backed indemnity scheme, offers support for practices to boost their digital offering and brings in changes to QOF.

NHS pension

The contract document also confirms that GPs will be protected from the financial impact of a sharp rise in employer contributions planned under the NHS pension scheme.

A DHSC consultation published last month proposed an increase in employer contributions from 14.3% to 20.6% - which threatened to hike up costs for an average GP practice by around £50,000.

However, NHS England's contract document confirms plans for the government to 'provide additional funding for the full costs arising from this actuarial revaluation for the NHS in England'. The document promises: 'General practice will not have to bear any additional costs.'

Proposals to reduce the squeeze on the GP workforce created by pension limits run alongside wider proposals to bolster the general practice workforce through the five-year GP contract deal.

Primary care networks will receive recurrent funding to hire 'an army' of 20,000 staff over the coming years. This recruitment drive is intended to boost the resilience of general practice by building a strong primary care team around practices - including roles for pharmacists, physios, advanced nursing staff and others.

Click here to read more from GPonline on the five-year GP contract

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