NHS Pensions: Taxation

Part of the debate – in the House of Commons at 4:21 pm on 8th July 2019.

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Photo of Philippa Whitford Philippa Whitford Shadow SNP Spokesperson (Health and Social Care) 4:21 pm, 8th July 2019

Tapering lifetime allowances have already driven many senior doctors out of the NHS in their late 50s. The issue now is the tapering annual allowance, which is reduced by £1 for every extra £2 earned. This issue was raised in 2017; it has not just come to light. In May the Chancellor talked about a threshold of £150,000, yet the problem kicks in at £110,000, and many senior consultants and GPs earn above that. The average extra bill is £18,500, but many have faced tax bills of almost £100,000. The British Medical Association survey shows that three quarters are citing this as a reason to retire. At the moment all income, including non-pensionable income, is included. That does not make sense, so can that be changed? It is not just earnings, but the growth of a pension, yet people might not live long enough for that to be income, so why is it counted? The BMA does not think that the 50:50 approach will solve the issue, so will the Treasury have open consultation and, because this is about interaction with the pension system, look at all the options? Otherwise, we will face a workforce meltdown.