Check your pensions

By Robin Stride

Busy independent practitioners are being urged to schedule space to get their pension position assessed following revised Govern­ment plans to ease doctors’ tax burdens.

Specialist medical financial planners warn that, more than ever before, senior medics will need to take some time to carefully plan their likely earnings and contributions for the foreseeable future. 

Patrick Convey, technical director of specialist financial planners Cavendish Medical, said: ‘This is an area which requires expert advice and careful modelling of the best options available. 

‘This is not a time to make any rash decisions without exploring every opportunity or threat to the financial status quo.’ 

With annual pensions statements now obtainable from the NHS Pensions Agency, he advised doctors to request their own statement as soon as possible and not wait for it to be sent automatically ‘as there can be errors in the system’. 

They should then use this as a basis for detailed discussions to ascertain their position and the resultant tax implications.

Total Reward Statements are also now available from the NHS Pensions Agency, which detail an individual employee’s basic pay, allowances and pension benefits, but do not include annual allowance liabilities. 

Cavendish’s plea came after Prime Minister Boris Johnson signalled that modifying doctors’ pensions was a main priority. 

Consultation scrapped

One of his first moves was to scrap a two-week-old consultation outlining a ‘50:50’ flexible pensions plan and replace it with new proposals to allow doctors increased control to scale down pension contributions or take their employer contributions as salary. 

Mr Convey said: ‘The NHS Pension Scheme has entered an unprecedented “blink-and-you’ll-miss-it” phase of announcements and about-turns. No sooner is one consultation launched than another quickly replaces it.

‘This latest attempt at easing the NHS workforce crisis means senior practitioners may be able to adjust their pension contributions in order to change their rate of pension growth.

‘The official line from the Dep­artment of Health and Social Care is that NHS scheme members could therefore choose to make contributions in 10% increments while receiving the equivalent accrual rate – possibly building a pension pot at a more gradual rate. 

‘While it is good news that the Government is no longer hiding from the very real problems that punitive tax charges are having on the NHS, on patients and on individual doctors, these plans will undoubtedly add significant extra layers of complexity for busy medics keen to just get on with helping people.’

Age discrimination

Meanwhile, some doctors could be compensated for age discrimination following a court ruling favour­ing firefighters. The Supreme Court upheld an earlier ruling that changes made to firefighters’ pensions in 2015 discriminated against younger workers. 

A review of pension-related age discrimination will now be conducted across all other public sector schemes. 

Under the 2015 changes, those ten years from retirement were protected from reforms which saw younger workers moved into less generous pension arrangements. 

In 2018, the court found that those too far away from retirement, and too young to qualify for ‘transitional protection’, were unfairly discriminated against.

The Treasury has stated that as ‘transitional protection’ was offered to members of all the main public service pension schemes, including the NHS, any firefighters’ remedy must be employed across all public sector retirement plans.

Mr Convey added: ‘This ruling may mean a windfall for affected NHS scheme members who were forced to move to the less generous 2015 pension scheme, but compensation has yet to be established.’