Source · Select Committees · Health and Social Care Committee
Recommendation 18
18
Deferred
Paragraph: 64
Prohibitively expensive pensions tax bills disincentivize older GPs from remaining in practice.
Conclusion
Older GPs continue to face prohibitively expensive pensions tax bills which act as a significant disincentive to them staying in practice. Efforts taken to date to reduce the impact on GPs have not been sufficient to prevent experienced GPs from leaving the profession in significant numbers, however we note the Government’s recent consultation on extending ‘retire and return’ arrangements into next year. Experienced GPs are also likely to be employers which may make their pensions arrangements more complicated.
Government response summary AI-generated
The government rejects the recommendation, stating that it does not accept it because the size and skills mix of the workforce are matters for individual general practices to determine, which is unrelated to the recommendation on GP pension tax bills.
Summary of the government's response below — read the verbatim text to verify.
Paragraph Reference:
64
Government Response
Deferred
HM Government · verbatim extract
Deferred
Partially accept. The Department partially accepts this recommendation. We appreciate the Committee’s continued focus on this important issue and fully recognise the impact that pension tax charges can have on some senior clinicians, including experienced GPs. The Government has recently acted to remove the Annual Allowance Charge as a barrier to doctors remaining in work. As announced at Spring Budget 2023, the Annual Allowance will be raised from £40,000 to £60,000 from 6 April 2023. This will mean that fewer people will be impacted by annual pension tax charges, which we expect will encourage GPs to continue to work. In addition, the Department has changed NHS pension scheme rules to prevent staff receiving unintentionally higher annual allowance tax charges driven by the current high inflation environment. Taken as a whole, these tax measures will encourage experienced GPs to remain in practice. As promised in Our Plan for Patients, we are implementing new retirement flexibilities to help retain experienced staff, including GPs, whilst making it easier and attractive for retired staff to return. We abolished from 1 April 2023 the pension rule that staff could only work up to 16 hours a week in the first month after returning from retirement without affecting their pension. We removed from 1 April 2023 the rule that prevented retired staff who return to NHS work from re-joining the scheme and building up more pension. We intend making a new ‘partial retirement’ option available to staff from October 2023 as an alternative to full retirement. Staff will be able to draw down some or all their pension whilst continuing to work and build up further pension. Our Plan for Patients set out that we will work with NHS England to ensure that NHS employers are able to offer local solutions to pension tax issues such as employer pension contribution recycling. This is already within the gift of employers in general practice. However, the changes announced at Budget mean far fewer staff will now experience pension tax issues and so the need for local solutions reduces.
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