Members will have seen reports in the national media that the Government has made an exceptional case to allow the NHS to intervene to offset pension taxation for doctors working on the ‘front-line’ of healthcare for the 2019/20 winter.
The Government’s position on this exceptional measure can be found at the following link: https://www.gov.uk/government/publications/senior-clinicians-pensions-letters-between-dhsc-and-nhs-england
It is worth highlighting a number of factors pertinent to this measure:
- Representatives from across the Public Sector Pension schemes have been engaged with central Government over the inability of members of Defined Benefit public sector pension schemes to modulate their pension inputs to allow them to avoid breaching annual allowance limits – and thus landing themselves with a personal tax bill for carrying out work. The Forces Pension Society have been heavily involved in this work on behalf of Armed Forces Pension Scheme members.
- Pension taxation (and specifically annual allowance and lifetime allowance) are Central Government measures. When the General Election was called, Parliament was dissolved and engagement by public sector pension scheme representatives had to be suspended until such time as a new Government is elected and formed. However, the NHS highlighted that this ‘pause’ prevents any formal solution to the immediate problem that NHS doctors are unwilling to take on the additional work necessary to deal with growing waiting lists, as to do so will see them lose all the income in pension taxation.
- The NHS have therefore sought and gained exceptional authority to allow them to ‘buy out’ any pension taxation debts falling to individual doctors as a result of them working extra hours to deal with waiting lists. This authority applies to front-line doctors only, and only for the winter of 2019/20.
- The NHS measure is therefore a bespoke emergency measure to deal with an immediate and pressing operational need, that cannot wait for a new Government to be formed.
The FPS remains committed to campaigning to seek a fair, long-term solution to pension taxation for Defined Benefit public sector schemes but we must wait for a new Government to sit to renew our engagements.
The central tenet to our engagements will remain that pension tax is having significant impact upon an increasing number of Armed Forces personnel, and any long term solution for the NHS or other public services should be equally applicable to members of the Armed Forces.