Consultants’ lobbying against pension tax pays off


Doctors have widely welcomed the fruit of years of lobbying the Government to ease to the punitive pension taxation rules. 

Dr Vishal Sharma

The head of the BMA Pensions Committee and chairman of the association’s Consultants Committee, Dr Vishal Sharma, called the scrapping of the lifetime allowance potentially transformative for the NHS, as senior doctors would no longer be forced to retire early.

He said: ‘The rise in the annual allowance will mean far fewer doctors will receive large punitive pension tax bills and will significantly reduce the perverse incentive to reduce hours due to pension tax. 

‘It’s also very welcome that the Government has committed to addressing the anomaly of ignoring any negative pension growth, and rectifying this will ensure NHS staff can appropriately utilise their full annual allowance.’

But he warned the changes did not address all of the issues and some doctors would still be adversely impacted by the annual allowance and in particular by the tapered annual allowance which was not meaningfully modified in these reforms. 

‘Consequently, a minority of doctors will still need to navigate the complexity of the annual allowance, an allowance which we believe is completely unsuited to defined benefits schemes such as the NHS. 

Civica Medical Billing

Discussions with the Treasury

‘This will mean some doctors will still need to think carefully before taking on additional shifts or doing overtime. We hope to continue our constructive discussions with Treasury in order to find a way forward to address this outstanding issue.’

Dr Sharma said it was vital to keep these limits under review to ensure their value was not eroded in real terms. ‘Otherwise, we will simply find ourselves in the same situation in a few years’ time.’

The BMA said pension taxation rules were financially penalising thousands of senior doctors, leaving many with little option but to cut their hours or retire early. 

Scrapping the lifetime allowance and increasing the annual allowance by 50% to £60,000 would significantly address this issue, enabling the vast majority of doctors to no longer receive huge pension tax bills.

But the Chancellor’s measures did not address all the issues and the BMA vowed to support doctors impacted by hefty bills, including those affected by the tapered annual allowance that has not been meaningfully reformed. 

It said it would continue to campaign on their behalf so they could take on additional shifts and overtime without fear of being penalised.

‘Trap still exists’

Dr Sarah Tennant

The Hospital Consultants and Specialists Association (HCSA) labelled the pensions tax changes ‘a big step forward’, but its pensions committee chairwoman Dr Sarah Tennant cautioned that there was still a risk the annual allowance – seen as one of the biggest traps for experienced hospital doctors – would remain a problem.

She said: ‘Some concern remains that the increase in annual allowance to £60,000 may still land senior doctors with unexpected tax bills, but the decision to allow negative pensions growth in one scheme to be offset against positive in another will help to alleviate the issue.’


Mr Tim Mitchell

At the Royal College of Surgeons of England, vice-president Mr Tim Mitchell said surgeons faced difficult decisions around pensions, tax and retirement. 

’Many experienced surgeons have felt they have no option but to reduce their operating hours or retire early due to the pensions’ tax issue, and this is at a time when we have a record 7.21m  people on the NHS waiting list.

‘We hope these changes will ensure that many surgeons won’t have to make the tough decisions of reducing their hours or retiring early, verses staying in employment. This is especially at a time when we want to retain them in the workforce to treat patients and to train the surgeons of the future.’


Prof Andrew Elder

While welcoming the pension tax changes, the president of the Royal College of Physicians of Edinburgh warned the reasons behind early retirement from the NHS went well beyond finance. 

Prof Andrew Elder said: ‘Our most experienced doctors need to have the time to undertake not only their work with patients, but also to teach and train those who will follow them. Lack of time for these two core elements of professional life leads to burnout and moral injury.’

The college welcomed changes in childcare provision, which it said would allow doctors at all stages of their careers to structure a more meaningful work-life balance.