“Is that all there is?” Doctor’s reaction to yesterday’s NHS pension solutions

Dr Tony Goldstone’s Twitter header

Yesterday , Therese Coffey, new to post and sharing her duties as Minister for Health with her being Deputy Prime Minister, laid out her plans to get the NHS back on its feet.

We know from the work of the Covid Actuaries and others that this summer we have had a winter’s strain on the NHS, the lag of diagnosis and treatment of illnesses during the pandemic is now catching up with us and excess deaths are running at around 6% this year.

Whether you consider this an acute crisis or a ramping up of a chronic malaise, it is clear that with 10,000 vacancies, the NHS is understaffed, the particular worry is that senior doctors are leaving , claiming that it is not economically viable to continue to work and build pension rights, when those rights are liable to penal taxation.

The Government says it’s recognising the problem

The measures for doctors do appear to be targeting the most draconian threats to doctor’s income.

Amid concerns over a pension regime that is leading many senior doctors to reduce their hours or retire early, Coffey announced changes aimed at reducing the risk of staff breaching their annual savings allowance, and facing tax charges, because of high inflation.

Under another key measure, all NHS employers will from next year be required to offer staff the option of taking their employer pension contribution in cash. This move is aimed at preventing doctors from retiring early because they were losing their employer contribution when they opted out of the scheme.

So what is going to happen

Thanks to Jo Cumbo for finding the relevant section of the Department of Health’s “Plan for Patients”.

Of course “pension saving”, cannot be considered “tax-free” as the Government statement calls it;  “tax- advantaged” is a better phrase and what the Government is trying to do is to stop pension contributions being “disadvantaged” so that pension contributions, both from the Doctor and the NHS are more penal in taxation than pay.

What is the preferred solution of the doctors?

Dr Tony Goldstone, who is widely acknowledged as an expert on the pension problem is not impressed.

Let’s start with his and the BMA’s preferred route out of the current pension crisis and the root cause of the problem today – inflation.

And what of yesterday’s remedy?

According to Dr Goldstone, what Therese Coffey was offering yesterday is not providing a solution that can allow doctors to stay in a pension and in their job

The BMA agrees

What is the strategic direction of pension taxation reform?

I would be surprised if the Chancellor offers more to Doctors (and to the nation) by way of reforms to the Annual Allowance or the Lifetime Allowance.

These are the two pillars that prop up the pension taxation system which has been promised reform for decades, reform that has consistently been ducked by Governments fearing the political consequences of redistributing the pension taxation burden from poor to rich.

Any radical reform of pensions would undoubtedly look to contain the overall burden at around the current net cost to the tax-payer (estimated c£39bn).

As Doctors and other senior NHS consultants are seen as enjoying  most favorable pension provision , the direction of travel from more radical pension reform is unlikely to help doctors in their total reward.


Therese Coffey will sing “we’ve gone about as far as we can go”, the Doctors will reply “is that all there is?”,  The Chancellor won’t join the party.

The BMA want a carve out for doctors that treats them as special, the NHS is either unprepared or unwilling.

So we have the unedifying spectacle of a pension solution which means leaving pensions, something that Dr Tony Goldstone in the header to this blog, is fundamentally opposed to.

Another sticking plaster applied to a festering wound. Will it stop the depletion of the NHS’ senior doctors to retirement? I think it may help, but not enough.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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