HCSA asks Treasury Select Committee for inquiry into NHS pensions 'Russian roulette'

HCSA has called on the Treasury Select Committee to mount an urgent inquiry into the impact of current pensions rules on patient care.

In a letter to Committee chair Nicky Morgan MP, HCSA says that changes to Pensions Lifetime and Annual Allowances are affecting the behaviour of particularly senior doctors in three ways:

  • In disincentivising additional shifts, which may effectively be unpaid or push hospital doctors over a tax “cliff edge,” or causing hospital doctors to seek to reduce their working hours.
  • In incentivising early retirement. 
  • In incentivising members to leave the pension scheme early. 

"This situation risks deepening the existing workforce crisis in the NHS," HCSA warns.

HCSA is warning that four in 10 doctors (41.7%) are set to retire early because of the recent raft of pensions changes and spark a "full-blown crisis".

Current pension rules introduced in mean that Hospital Doctors who comply with requests to work even a handful of extra shifts to bridge staffing gaps can slip over annual earning thresholds and trigger sudden tax bills running into tens of thousands of pounds.

HCSA spokesman Dr John West said: “The impenetrable pension tax reforms of tapers, triggers and annual allowances mean that hospital doctors are playing a game of financial Russian roulette where taking an extra shift to meet the healthcare needs of patients and employers could land them with an unexpected tax bill in the tens of thousands at the year’s end.

“The predictable result is that more and more doctors are avoiding the stress, risk and confusion altogether by adopting a cautious approach. We know that for some, this is the final straw that is pushing them to leave the service altogether.

“So at a time of chronic workforce shortages, we see a pensions system which is driving our most experienced hospital doctors to cut back on work. It is an example of unforeseen consequences which exposes a totally dysfunctional relationship between HM Treasury and the Department of Health and Social Care.

“Our hospitals are held together by medics working extra hours to meet an ever-growing caseload. Advertised medical vacancies stand at one in 10, with the real level of rota gaps far higher.

“As more and more hospital doctors become aware of the problem or are ambushed with unexpected tax demands, there will unavoidably be a harmful impact on patient care.

“The NHS needs this additional pressure like a hole in the head. Without a widespread review of the system this will get worse and worse – we are urging the Treasury Select Committee to expose the facts and propose a resolution that will address this issue before it snowballs into a full-blown crisis.”

As part of HCSA research among 857 Hospital Doctors presented to the Hospital Doctors' pay review body in January, 41.7% said pension taxation changes had led them to change their plans to now retire earlier than previously expected.