A freeze on the pensions lifetime allowance threatens a 'catastrophic exacerbation' of the existing medical workforce crisis because it could force more doctors to reduce their working hours or retire early to avoid punitive tax bills, BMA leaders have warned.
A BMA poll of more than 6,000 GPs and hospital doctors in 2019 found that that 31% had reduced their hours due solely to pension tax charges - while 57% were considering early retirement for the same reason.
Numbers of GPs taking early retirement have tripled over the past decade - a rise the BMA has blamed in part on tax charges - and the GP workforce has declined over the past year despite government promises to increase it.
The government increased the threshold for the annual allowance by £90,000 in last year's budget, a measure welcomed by doctors' leaders and medical accountants - but high-earning doctors continue to be affected by heavy tax charges that can mean they lose more in tax than they would earn for taking on extra work.
BMA leaders have warned a freeze on the lifetime allowance - a change widely reported to be under consideration as part of the budget announcement this week - would deepen the problem at a time when thousands of doctors say they are considering quitting the NHS once the worst of the COVID-19 pandemic is over.
The BMA has written to the Treasury and DHSC to demand meetings with chancellor Rishi Sunak and health and social care secretary Matt Hancock ahead of the budget announcement on Wednesday.
The letters, from BMA pensions committee chair Dr Vish Sharma, warn: 'Both the available annual allowance and lifetime allowance - including its annual indexed linked increase - are carefully considered by senior NHS workers when determining their working patterns for the following year and ultimately their retirement plans.
'The NHS faces an extremely challenging period for the foreseeable future as it desperately tries to ensure that those patients whose care has been impacted by COVID-19 can receive the high-quality care that they deserve. We are deeply concerned that if you press ahead with this policy, this will result in large numbers of doctors retiring early or working less than full time, at the very time our patients need them the most.'
BMA leaders have also raised concerns over the government's approach to NHS pensions compared with schemes for other parts of the public sector. GPonline reported last week on BMA concerns that despite the government agreeing a change to pensions for the judiciary that effectively exempts judges from pension tax, reforms to ease the impact of pension tax on high-earning NHS staff had not been considered.
The BMA pensions committee chair adds: 'Because of chronic and historic understaffing in the NHS, no doubt worsened by the impact of COVID-19, many healthcare workers are currently working significantly above and beyond their expected hours.
'This situation will clearly continue as the NHS now looks to reduce the significant backlog which has arisen due to the pandemic. We are gravely concerned that even with current pension taxation legislation and existing indexed lifetime allowance this is already a potent driver towards less than full time working and early retirement. Any further detriment to the lifetime allowance, such as that reported in the media, could lead to a catastrophic exacerbation of this already precarious workforce situation.'