Top A&E doctor: Pensions tax puts safety at risk over winter

The warning from the Royal College of Emergency Medicine president comes as it releases survey results confirming emergency medics were considering cutting hours down because of the tax issue.

In its survey, more than three-quarters (77 per cent) of respondents were thinking about cutting down their clinical commitments.

It was carried out in the summer, before the latest proposals put forward by the government to revise the rules from April next year.

RCEM president Katherine Henderson warned that despite the latest intervention, emergency medics would cut their hours. 

She said frontline emergency department staff “overwhelmingly” believe the recent changes to pension rules will have knock-on effects for patient care, adding: “The number of doctors who have told us they have, or are, considering reducing their hours is really worrying for NHS patients, particularly going into what will likely be another tough winter.”

The Department of Health and Social Care has previously estimated roughly a third of consultants and GPs may be less willing to take on extra work because of “how the NHS Pension Scheme interacts with the wider pension tax rules”; while national officials think the crisis may reduce total senior medical capacity by around 10 per cent.

Dr Henderson said the latest government proposals for greater flexibility on clinicians’ pensions tax “do not address” the issues facing services this coming winter.

She said: “Given the sheer complexity of the scheme, and the confusion around what this additional flexibility means, we fear that many consultants will ‘play it safe’ and continue to reduce their clinical commitments to avoid any financial risks this taxation issue brings.

“This means rota gaps will worsen as winter arrives, patient safety will be compromised and patient flow will worsen.”

‘Comprehensive’ proposals

Dr Henderson has urged the Treasury to “urgently” find a solution to the problem, adding: “We would strongly recommend the suspension of the taper so doctors can be reassured that taking on extra shifts will not end up costing them financially.

“We would also encourage greater clarity [in the consultation]. Our survey also showed just 2 per cent of staff understood the rules. Many have consulted financial advisers who themselves struggled to understand the arrangements. Better communication may help ease this issue.”

The survey, shared exclusively with HSJ, also found:

• Only 2 per cent of respondents found the current pension tax arrangements easy to understand;
• Four out of five respondents did not feel knowledgeable enough to answer the Department of Health and Social Care’s questions in the pension consultation;
• Just over half (51 per cent) said they had been directly affected by the pension tax rules;
• Nearly half (48 per cent) were unsure whether they would bring their retirement plans forward, although the rest said they would not; and
• Almost all (98 per cent) believed the pension tax rules would have a detrimental effect on patient safety. 

The DHSC’s latest proposals included allowing consultants, GPs and senior nurses to customise their pension growth level at the start of each tax year and pay correspondingly lower contributions.

This level would be a percentage of the normal scheme contribution in 10 per cent increments – for example, at 30, 50 or 70 per cent of the full accrual level.

The RCEM survey, which ran from 22 July to 26 August this year, had 506 responses.

A DHSC spokesman said the government had released “comprehensive” proposals to make it easier for senior clinicians to manage their pensions.

He added: “The guidance has been issued to trusts so they can provide flexibilities this tax year, including offering senior clinicians further support and reimbursing staff who opt-out of the pension scheme so they can continue to do the job they love.”

HSJ has approached the Treasury for comment.

The annual allowance taper, which was introduced in April 2016, lowers the amount of pensions tax relief available to those with a threshold income over £110,000, gradually reducing it from £40,000 to £10,000.

There has been widespread concern this has left higher earners in the NHS pension scheme with large tax bills, encouraging some to opt out of the scheme, turn down additional work or leave the NHS entirely.