Doctors awake to more expensive pensions


This blog applies to people in the NHS pension scheme (for whom the problems with pension taxation are most acute) – but it also applies to anyone in the armed forces, the civil service, teachers, judges, fire and policemen. It’s a problem created out of the immutable problems of public and private sector pay, of tax subsidies and of the widening gap between the retirement prospects of those looking forward to a pension (an income for life) and a pot of money to spend with pension freedom.

I say immutable because, unless we work to a single system of second pillar pension benefits, there are going to be winners and losers in all this and the various inequalities , cross-subsidies and vagaries are ambiguous, they can be read either way.

Over the weekend , while riding trains around Sri Lanka, my mobile merrily pinged away with the tweets of at last count 73 contributing doctors all keen to participate in a debate on the lifetime and annual allowances for their pension entitlement.

It is clear that doctors aren’t happy with their lot -this tweet is typical of the tone of the conversation.

The debate is febrile because pension contributions are rising and so are the tax-bills for those with high earnings , high pension entitlements and substantial increases in those entitlements year on year. The debate is also febrile because of the lack of expertise available to doctors to sort out problems they see as not of their making. Their is also distrust of the expertise that is available and a perception that advisers are more interested in their own pockets than their clients.

Added to this is a reluctance , even among well paid doctors and consultants to pay the going rate for truly independent financial advice (which is clearly not seen as on a par with other professional services – legal/accountancy for instance).

Immutable but bearable?

I would mind against taking a dim view of public service pensions. They are unfunded (other then the MP , LGPS and a few other specialist schemes), they are efficient and they are well governed.

What we are seeing with doctors is a an awakening of interest in a subject that till now, they need have little  interest in. This is because resources are finite and Government needs to trim the cost to the taxpayer of what others see as disportionate pension benefits.

The attempts to put everything on a single footing have so far failed (pensions simplification 2006 being the last).

Going forward we will have to consider the consequences of the pensions debate in a broader context that includes both funded and unfunded second pillar pensions.

This will be part of the pensions map that we intend to draw for the pensions industry.

For most pension experts, who are in hock to the fund management industry, public sector pensions are of no commercial interest, but if we are to avoid a wider breakdown in trust in pensions, we must answer the questions of health professionals and those in the wider world of public sector schemes.

I look forward to posting blogs from those impacted by the various changes to public sector pensions and their taxation in coming days.



About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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3 Responses to Doctors awake to more expensive pensions

  1. Adrian Boulding says:

    Henry please bring us some tea back! Sri Lanka grows some fantastic teas, both black and green. Enjoy your trip, Adrian

  2. Mark Meldon says:

    This has been rumbling for years; indeed, I was involved with a GP who took ’24 hour retirement’ and drew her NHS pension precisely for this reason. After a few weeks off, she went back part time, after setting up her £48,000 p.a. pension. At 54. No longer in pension environment, saves a boatload of contribution deductions from pay, etc. etc. She is an excellent GP and I’m sure very many Doctors have done the same thing, so we are losing the experienced ones.

  3. kate upcrft says:

    HI i’m at Girton for my annual time with the Cambridge Colleges, been discussing the LTA here for both USS and CCFPS

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