Pension tax warning as BMA highlights NHS shortfall of 50,000 doctors

Doctors' leaders have urged the government to stop pension tax driving a wave of early retirement, amid BMA warnings that the NHS is 50,000 doctors short as it faces what could be 'one of the worst winters on record'.

BMA chair Dr Chaand Nagpaul (Photo: JH Lancy)

Delegates at the 2021 BMA annual representative meeting (ARM) unanimously backed a motion warning that 'large numbers of doctors are now swelling the ranks of retirees much earlier in their careers due to low morale, higher workload and punitive pension taxation'.

The warning came as the BMA highlighted a 'frightening' gap between numbers of doctors in England compared with EU countries.

Estimates by the association show that England has just 2.8 doctors per 1,000 people, compared with an EU average of 3.7. Matching the EU average would require an increase of 50,191 full-time equivalent doctors.

NHS workforce

GPonline reported in 2019 that numbers of GPs taking early retirement had tripled in a decade as punitive pension tax rules forced doctors to limit their working hours.

Last year, the government increased the pension tax threshold by £90,000 in a bid to stop doctors reducing their working hours, in a move widely welcomed but which accountants warned did not address the problem of the annual allowance for higher earners. The government has also frozen the pensions lifetime allowance for five years in a move doctors fear will deepen the workforce crisis.

Meanwhile, accountants have warned that upcoming changes to tax rules could trigger a sharp rise in income tax for GPs next year, creating 'catastrophic' cashflow problems and a spike in pension annual allowance charges.

Addressing the conference Dr Russell Walshaw said the 'unprecedented attrition rate' meant the NHS was losing large numbers of doctors far earlier in their careers.

Retaining staff

He said: 'We are losing cohorts of doctors well before they used to leave the profession. Of the 9,000 new medical graduates this year we are told that many no longer intend to practise medicine. These are not good statistics.

'I am concerned that we retain sufficient doctors to provide healthcare to the population including increasing numbers of older people who have benefited over the years from better healthcare. The government has not produced the 5,000 additional GPs nor the increased numbers of hospital doctors it promised five years ago, and is more and more unlikely to do so given this current attrition rate.'

He said a failure to recognise and reward doctors properly for the intense workload they face was a key factor behind early retirement - warning that 'penal taxation on pension savings' was a key factor.

BMA chair Dr Chaand Nagpaul told the conference he had raised the issue of pensions with health and social care secretary Sajid Javid within two days of him taking up the role - and said it was in the government's interests to solve the problem if it wanted the NHS to cope with the pressures ahead.

EU shortfall

Commenting on the workforce shortfall, the BMA chair said: 'It’s frightening to see that the gap between the number of doctors in England and comparable EU nations is widening at such pace.

'For those still working in the NHS, who knows how long we’ve got them for. Rather than actively retaining staff, government has stood by as doctors work themselves to the point of exhaustion, with many now considering leaving the NHS, further depleting us of expert, talented colleagues.

'Winter is an incredibly difficult time for the health service, and we just about made it through last year with the demands of COVID-19 on top of usual pressures. With flu season on the horizon and even fewer staff this time round, it’s a total unknown as to how well our services will cope.'

Read the motion in full:

Motion by SCUNTHORPE DIVISION: That this meeting is concerned that:
i) large numbers of doctors are now swelling the ranks of retirees much earlier in their careers due to low morale, higher workload and punitive pension taxation

ii) the effect of punitive pension taxation on doctors retiring early has not been properly addressed by HM Government

iii) current pension policy does nothing to address the medical workforce crisis

iv) the lifetime allowance is a disincentive to doctors, should they wish, to work above their contracted hours and on to normal retirement age

v) this meeting, while recognising the work already done by the pensions committee, calls on the association to continue to engage in hard negotiations to eliminate these disincentives to encourage our colleagues to remain longer in active clinical practice.

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register

Already registered?

Sign in

Just published

Kamila Hawthorne

GP crisis could force one in four practices to close, says RCGP

Unmanageable pressure could force more than a quarter of GP practices to close, polling...

COVID-19 vaccine in pregnancy

Vaccination in pregnancy cuts COVID-19 risk for mother and baby

Vaccination against COVID-19 during pregnancy reduces the risk of infection and hospitalisation...

Child using smartphone

NICE backs digital CBT games for children with anxiety or low mood

GPs could prescribe CBT-based digital games, videos and quizzes for children and...

GP surgery sign

GP pressure to continue as experts warn NHS backlog will remain through 2023

General practice faces continuing heavy pressure after experts warned that the record...

Close-up of a man loading a shotgun

BMA updates GP firearms guidance as digital marker goes live on EMIS

The BMA has updated its guidance for GPs on firearms licensing following the release...

Map pins

Severely underdoctored areas spread across nearly every NHS region

Severely underdoctored areas exist in nearly every NHS region across England, figures...