Pension taxes force one in three GPs to cut back work or refuse shifts

One in three GPs have reduced work or refused shifts to avoid pension taxes that can mean doctors lose money for working more, a GPonline survey suggests.

GP consultation (Photo: Robert Johns/UNP)
GP consultation (Photo: Robert Johns/UNP)

Many more GPs have quit the NHS pension scheme, taken early retirement or dropped out of leadership roles to reduce their income in a growing problem that the BMA's GP committee says is a key factor behind the general practice workforce crisis.

Findings from the GPonline poll expose the impact on general practice of pension tax rules that BMA leaders say have left the NHS facing a 'massive loss of capacity'. GP respondents said out-of-hours organisations had been left short of staff, fewer GP trainers were available, and struggling practices were unable to fill shifts because doctors who were willing to work would be penalised for doing so.

More than three quarters (76%) of the 560 partners, locum and salaried GPs who took part in the survey said they were concerned about the potential impact of pension taxes on the GP workforce.

GP workforce

Almost one in three (31%) GPs had reduced their working hours, dropped out-of-hours shifts, refused extra shifts to cover vacancies or dropped out of leadership roles because of concerns over pension taxes.

A fifth of GPs said they had reduced their working hours - rising to one in four among partners and locum GPs.

A total of 22% of locums said they had quit the NHS pension scheme, and 7% had taken early retirement, while among partners 15% had left the pension scheme and 6% retired early.

The findings come after the BMA warned this month that an 'increasing number of doctors and other NHS workers across the UK are encountering serious difficulties with the current annual and lifetime allowance taxation rules'.

NHS pensions

A tapering mechanism that reduces tax relief on pensions in stages for people earning over £110,000 per year has left some doctors facing 'cliff edges' where additional tax exceeds earnings. GP leaders say that even doctors in their 30s have been advised to cut back their working hours to avoid the punitive charges.

BMA GP committee chair Dr Richard Vautrey told GPonline: 'This is a major and growing problem and is one of the key factors undermining GP workforce retention. GPs are increasingly faced with punitive tax bills, over which they have little control or warning and it's no surprise that so many are being forced to reduce their risk by cutting back on clinical sessions, quitting the pension scheme or leaving general practice altogether.

'At a time when patients are struggling to get appointments this is a serious loss to the service and government must take this situation much more seriously. We secured a commitment as part of contract negotiations to jointly work with NHS England to lobby Treasury on a 50.50 pension option, and while a version of this is operating in local government it would need to be adapted for general practice to make it a useful option.'

Both the BMA and accountants have warned that 'more radical' solutions than the 50% 'partial pension' option must be considered to stop the medical workforce being undermined by pension tax rules.

BMA proposal

Dr Vautrey warned that 'even with such a scheme, without changes to tapering and other aspects of this complex problem, as well as improvements in providing pension information to GPs, we will continue to see the problems for professionals and patients alike'.

One GP who took part in the survey said the impact of pension taxes was 'poorly understood' by the government and was 'resulting in a haemorrhage of undervalued but highly experienced senior - and even less senior - clinicians'.

Another GP said: 'I am now planning to take early retirement. I'll draw my pension at 56 or 57 and stop all work at 57. This year I turn 55, I'm dropping from 12 sessions (portfolio) to 4 (practice partner only, and reduced sessions).'

Another GP respondent said: 'I am sure it wasn't the government's plan to push overstretched and stressed doctors into reducing hours or retiring early, but when faced with the reality that within 12-18 months I could in effect be taxed at 55% on any further pension payments I make it really doesn't make sense to carry on working as hard as I do.

Out-of-hours work

'I support the need for taxation and of course higher earners should pay proportionately more, but this is unreasonable and I, like many in the 50-60 age bracket am being forced to reassess my plans for the future.'

Another said: 'Absolutely bonkers. We are so short of GPs anyway. I dropped out-of-hours work because of the changes and my local out-of-hours have been severely affected because so many doctors have done the same. Also there are now very few GPs now providing training because of this. I have also reduced my hours in my own surgery and decided to leave the pension scheme so that I will have an opportunity to invest for my old age in something else. Total waste of resources.'

One GP said: 'Ludicrous. Some high-performing GPs just want to work. My partner aged 40, a single guy, is near his ceiling and has cut his sessions by three a week. Gun, foot, shoot!'

A DHSC spokesperson said: 'Doctors are the backbone of the NHS, providing excellent, safe care to patients around the clock. We recognise the tax implications of the annual allowance and its impact on all high earners in the NHS.

'We keep public sector pay and pensions policy under continuous review and are talking to HMT about this issue, and listening carefully to senior doctors and NHS employers.'

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