GPs taking early retirement triple in a decade as tax limits hit workforce

Numbers of GPs taking early retirement have tripled over the past decade as tighter tax limits added to pressure on the general practice workforce, government evidence on pay reveals.

GPC chair Dr Richard Vautrey (Photo: BMA)
GPC chair Dr Richard Vautrey (Photo: BMA)

In 2018 a total of 588 GPs took voluntary early retirement, representing 58% of all GP retirements that year, government evidence to the Doctors and Dentists Pay Review Body (DDRB) shows.

The DHSC evidence acknowledges the potential impact of lower lifetime and annual allowance tax limits on the GP workforce, and pledges to 'explore what, if any mitigation might be appropriate'.

The 588 early retirements in 2018 represent a sharp rise compared with 2008, when 198 GPs took voluntary early retirement, accounting for just 17% of all GP retirements that year.

Early retirement

More than half of GP retirements have been taken before normal pension age in every year since 2014, official figures show. In 2017 a record 62% of all GP retirements were voluntary early retirements, as 721 GPs claimed their pensions early.

GPC chair Dr Richard Vautrey told GPonline: 'The recent pensions changes relating to annual allowance and lifetime limits have had a major impact on GP retention.

'Many accountants are now advising GPs - even younger GPs - to reduce their clinical sessions or to retire altogether, because of the impact of these changes. We have called on the Treasury repeatedly to recognise this problem.

'This problem is only going to get worse unless government can take real steps to change the annual allowance arrangements.'

NHS pensions

Figures provided by the DHSC also show that numbers of GPs choosing to opt out of the NHS pension scheme are rising, up from 397 in 2012/13 to 652 in 2016/17.

The government acknowledges the potential impact of tax limits on pensions in its evidence to the DDRB. It says: 'There is evidence of high earning individuals opting-out of the scheme or leaving NHS employment through early retirement. Concerns were raised in last year’s DDRB report that this could be due the new lower lifetime and annual allowances tax limits which potentially affect some high earners.'

The DHSC evidence adds: 'The department recognises that annual allowance tax charges, particularly for individuals subject to a tapered allowance, reduce the incentive for higher earners to remain in the scheme or increase their pensionable earnings by taking on additional work or responsibilities.

'We are reviewing recruitment and retention of GPs and consultants, of which pensions tax changes will be a factor. We will explore what, if any mitigation might be appropriate in the context of total reward.'

The government's submission to the DDRB highlights that GPs who claim their NHS pension early are 'not necessarily' doing so to leave NHS service permanently.

It adds: 'The 'retire and return' employment flexibility enables NHS employers to support skilled and experienced staff who are approaching retirement and may otherwise retire and leave service, to continue working longer with less onerous commitments or fewer hours typically. It is a flexibility well known and used by GPs.'

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