Pension and tax reforms could cut GP pay by a third

Pension and tax reforms could slash GP pay by up to 30%, GP has learnt.

Dr Andrew Dearden: GPs may choose to invest their pensions elsewhere
Dr Andrew Dearden: GPs may choose to invest their pensions elsewhere

Figures obtained by the BMA from government actuaries show doctors’ pension contributions could double by 2015.

The changes come in addition to tax and national insurance changes already set to drive down GP income.

Changes to pension contributions mean GPs earning up to £110,000 could see their pension contribution rise from 7.5% to 13% by 2015.

High earning doctors paying 8.5% contributions could be forced to pay 15.5% by 2015, the BMA warned.

The BMA has hit out at plans to raise pension contributions just three years after a major overhaul of the NHS pension scheme. It says plans to raise overall contributions into the NHS pension scheme by 3% are unjustified.

Data from the Office for Budget Responsibility show the NHS pension scheme will deliver a £10.7bn surplus by 2015/16, while other public sector schemes head for deficit.

The civil servants’ scheme, which requires far lower contributions than those for GPs, faces a £14.5bn deficit.

A GP poll recently revealed that half of GPs could retire if the government implemented pension reforms set out in Lord Hutton’s review that would bring higher contributions and reduced benefits.

A BMA spokesman said plans to change NHS pensions were ‘pretty arbitrary’.

‘In the NHS, you can’t say it’s about reforming a pension scheme to address any perceived flaws, because that’s happened already,’ he said.

The spokesman said GPs were being ‘hit on several fronts’. In addition to rapid contribution rises, GPs pay employer contributions for their staff in addition to their own 14% employer contribution, he said.

Tax changes to the personal allowance for people earning over £100,000 would hit GPs, along with a 1% rise in national insurance contributions. Meanwhile, pensions are now being dynamised in line with the lower CPI measure of inflation, not the higher RPI measure, he added.

Dr Andrew Dearden, chairman of the BMA pensions committee, said GPs may choose to invest their pensions elsewhere.

The entire pensions scheme could be ‘seriously destabilised’ if enough NHS staff leave he said.

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