NHS waiting lists surge due to pensions row

Tuesday 09th July 2019 16:04 EDT

Waiting lists for routine surgery have risen by up to 50% in England because senior doctors say they cannot afford to work extra shifts.

Consultants have begun refusing to work beyond their planned hours after receiving unexpected tax bills, following new pension rules in 2016.

NHS hospitals said delays are becoming increasingly routine as a result.

The Department of Health said it aimed to solve the problem with more flexible pensions.

Consultants who earn more than £110,000 a year faced new limits on how much they could contribute to their pension from 2016. Complex rules mean the charges can be unpredictable if they go over the allowance.

But those near the threshold have few options to avoid the impact, other than reducing their hours, quitting the NHS pension scheme or taking early retirement.

The government gives tax relief on contributions to pension schemes, and allows up to 25% of the benefits to be taken tax-free at retirement. Since 2006, there have been limits on the amount that can be contributed each year and the total benefit that can be built up over a career.

If the growth in a doctor's pension scheme exceeds this annual allowance they face a charge, or a reduction in their pension benefits.

The limit on the annual allowance has come down from £255,000 a year in 2010-11, to £40,000 a year for those earning broadly less than £110,000 in 2018-19. In addition, a tapered annual allowance was introduced in 2016 for higher earners. This means that the annual allowance is reduced by £1 for every £2 earned, says the British Medical Association (BMA).

It says a major problem for doctors is that all their income is taken into account when calculating their annual allowance, including work that is non-pensionable. In addition, the annual allowance is based not just on their annual income, but also on the growth in their pension pot.

Because of the way the allowance is calculated many consultants will face a significant tax bill even if their earnings are only just above £110,000 a year.

There is also a lifetime allowance to consider. Doctors who accumulate just over £1 million in pension funds become liable to pay tax on their pension.

NHS Providers, which represents hospital trusts, said senior staff were now saying they could not afford to work at weekends to bring waiting lists down.

A senior anaesthetist at one hospital worked 27 Saturdays last year to reduce waiting times but now cannot afford to, the organisation said.

Another hospital has seen numbers waiting for routine surgery increase by 50% since April, with staffing issues due to the pensions problem partly to blame.

NHS Providers said a solution is needed urgently and the government is moving too slowly.

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