NHS Employers, the body that provides guidance on NHS pay and pensions, has compiled a list of organisations able to give advice to doctors faced with tax issues.
At the same time, the entity has given the green light to trusts to offer cash to senior clinicians in lieu of pension contributions as a temporary solution before new government measures kick in.
In a 15-page guide published yesterday (September 2) for employers, the body stated that pension tax can be a complex area, and doctors are strongly encouraged to take independent financial advice to “ensure their decisions are well informed, based on reliable and accurate information and positioned in the context of their overall individual financial position and long-term plans”.
Among the 12 organisations listed on the NHS Employers website are financial advice firms Tilney, Chase de Vere and Wesleyan.
The body stated it isn’t promoting or recommending the use of any firm mentioned, and may amend or update this list at any time.
It emerged in December that the number of members leaving the NHS Pension Scheme was five times higher than that seen by other public pension funds, most likely because of the taper on the annual allowance.
Introduced in 2016, the tapered annual allowance gradually reduces the allowance for those on high incomes, meaning they are more likely to suffer an annual tax charge on contributions and a lifetime allowance tax charge on their benefits.
The taper means that for every £2 of adjusted income above £150,000 a year, £1 of annual allowance will be lost.
HM Treasury has pledged to review the impact of the tapered annual allowance after doctors have been campaigning to scrap it for months.
This was as part of a further consultation on the rules of the NHS Pension Scheme, which will soon be published and replace the document published in July.
NHS Employers also stated that a short-term solution for this issue could be for trusts to make an additional pay offer to staff using any unused employer pension contributions, which is already a practice put in place by some NHS employers.
This option could be appropriate where a doctor has chosen to opt out of the NHS Pension Scheme for the whole year or just part of the year, or agreed with their employer to convert previously pensionable pay to non-pensionable pay, due to concerns about pension tax charges.
NHS Employers stated that the payment of additional salary in lieu of pensions may be considered necessary to recognise that scheme members affected by tax issues won’t get the full value of benefits other colleagues might get.
The cash payments are one way to restructure the employee’s total reward package in order to maintain its value, it added.
However, employers are under no obligation to take this step, but they may use their discretion to design and agree local policies, working with employees and trade union representatives.