One in four GPs reduced their workload this year due to issues related to pension taxation rules, amounting to a potential loss of four million appointments in England, the BMA has found.
A BMA survey of more than 5,000 doctors – including 907 GPs – found that ‘significant’ proportions of doctors have reduced their hours this year due to the tapered annual allowance (AA).
It found that 23% of GP partners reduced their ‘regular workload’ due to the tapered AA, with reductions averaging 1.7 sessions per week, the union said.
In addition to this, 21% of GP partners said they have reduced their other remunerated work (such as out-of-hours work),18% have reduced their additional cover sessions, and 16% have reduced additional funded service provision at their practice this year, due to the tapered AA.
The BMA explained that the AA is a threshold which restricts the amount of tax-free pension growth allowed each year. When this threshold is breached, a tax charge on the amount of pension growth exceeding the threshold is payable at one’s marginal rate of income tax.
This can be triggered by taking on extra work, such as initiatives to clear waiting lists, creating a ‘cliff-edge’ where earning as little as £1 more can result in an additional tax bill of £22,500, which would mean the doctor would be ‘literally paying to work’, the union added.
It also warned that almost all of this extra work is ‘non-pensionable’, meaning it also does not result in increased pension benefits on retirement.
Ahead of the chancellor’s Spring Statement on Wednesday, the BMA has written to the Government urging it to address the situation by removing the annual allowance taper.
The survey results
General practice
• 23% of GP partner respondents have reduced their regular workload this year due to the tapered AA, with reductions averaging 1.7 sessions per week. This implies a potential loss of around 4.0 million appointments in England this year alone.
• 21% of GP partner respondents have reduced their other remunerated work (e.g. out-of-hours work), 18% have reduced their additional cover sessions (i.e. for holiday and sickness cover), and 16% have reduced additional funded service provision at their practice this year due to the tapered AA.
Consultants
• 21% of consultant respondents have reduced their ‘regular overtime’ this year due to the tapered AA, with reductions averaging 1.4 sessions a week. Additionally, 16% consultant respondents have gone part time this year due to the tapered AA, with reductions averaging 1.9 sessions. A full-time consultant works 10 sessions per week. Combined, these regular hours reductions represent potential lost capacity equivalent to around 3,500 consultants in England this year alone.
• 24% of consultant respondents have reduced their ‘ad hoc’ overtime/WLIsessions due to the tapered AA, with reductions averaging 5.1 hours a week. This implies a potential loss of around 3.2 million hours of WLI work that would have been offered to the NHS in England this year alone, equivalent to around 1,900 full time equivalent consultants’ worth of work.
• These results suggest that combined there has already been a potential loss of capacity of around 5,400 consultants’ worth of activity – i.e. 9.3% of the total consultant workforce in England this year alone.
Source: BMA
BMA pensions committee chair Dr Vishal Sharma said: ‘This situation is being felt across the NHS and not just in secondary care with 23% of GP partners who responded saying that they have also reduced their regular workload this year due to the tapered AA, with reductions averaging 1.7 sessions per week.
‘This implies a potential loss of around four million GP partner appointments in England this year alone. Furthermore, these reductions do not take into account the additional work that consultants and GP partners have declined to do. Consequently, the lost capacity may be even greater.’
He added that this is an ‘absurd’ situation where the Government is promising to bring down waiting lists but tax rules are getting in the way of this.
Dr Sharma added: ‘We’re urging the Government, ahead of next week’s Spring Statement, to urgently address this head on, by removing the annual allowance taper.
‘This would be one of the quickest and most cost-effective ways of increasing NHS capacity whilst still ensuring fairness for the taxpayer as higher earners would still have limits on tax relief via the standard annual allowance.
‘It would maximise the amount of work doctors can do, particularly at a time when patient demand is outstripping the number of doctors available to treat them, and be a huge step forward in the Government’s attempt to bring down waiting lists.’
A Government spokesperson told Pulse: ‘The annual allowance begins to taper for consultants who earn more than £260,000 per year, and the Lifetime Allowance on pensions was abolished to ensure consultants can work their full hours, a move supported by the medical community.
‘Through our Plan for Change we are working with GPs to reform primary care, cut red tape and bring back the family doctor, and we have agreed a new contract worth £13.2m.’
Last year, the BMA claimed that thousands of GPs in England were experiencing significant issues with their pension records due to ‘maladministration’ by Capita.
And last week, Pulse revealed that about 25 practices in London have been affected by a ‘significant’ issue with pension contributions.
Working an extra day per week would earn me £11 after tax. I would pay more than that not to work.
I’m a locum but as retired am out of the pension debacle. Lucky. I always worked full time, all sorts of extra work. Good career overall. Now…all gone. Pensions, tax with loss of personal allowance, child care over £100k etc. Leave out the student loans, adversarial work, awful workload etc. .New Zealand – Australia – Canada are we’re ones career should be. Ireland also worth a look.
Agreed JC the UK is a toxic place for medics
Am I missing something? Does this mean 1 in 4 GP’s are over the tapering threshold of £260k if they don’t drop their hours? At a time we are trying to tell the government we are under funded!?