Doctors could claw back £11m in LTA charges

Doctors could claw back £11m in LTA charges

Several hundred doctors could collectively save £11m if they apply for lifetime allowance protection. 

A Freedom of Information request submitted by Quilter found 413 members of the NHS Pension Scheme who have retired and paid lifetime allowance tax charges could have benefited if they applied for protections.

As the LTA tax charge is 25 per cent, these members could collectively have saved £11,094,979.

But as Quilter pointed out, these doctors are able to apply for individual protection retrospectively.

It has now raised this issue directly with the NHS Business Services Authority, which is going to contact the impacted members and alert them to their options.

Graham Crossley, NHS pension specialist at Quilter, said: “This Freedom of Information data illustrates how an extremely complicated pension taxation system in the UK can cause significant numbers of doctors to fall through the cracks and ultimately pay much more in pension tax than needed.

“There remain numerous problems surrounding the public sector and NHS pensions which desperately need the government’s urgent attention, but it is a pleasure to unearth this opportunity to do some good and help a group of people that have spent their careers helping others.

“We were really pleased that the NHSBSA team were happy to enter a dialogue with us about how to target this issue and it is a credit to NHSBSA to have agreed to write to all impacted members, so they have the chance to save money on their pensions that they have spent their whole career building up.”

Savers are able to protect the value of the benefits built up, and in some cases future benefits that may accrue, from tax charges.

Individual protection 2016 is for those who already had pensions valued at over £1m when the LTA was cut the last time.

It allowed them to lock in a personalised LTA set at whatever their pensions were worth at the time and to continue saving. 

Back in September, LCP warned the number of people protecting themselves against breaching the lifetime allowance was slowing down

It was after data from HM Revenue and Customs showed more than 325,000 people registered for protection against the lifetime allowance since its inception in 2006 but only about 4,000 people did so in the most recent year. 

The consultancy also warned this issue was likely to become more important following the government's implementation of a five-year freeze in the value of the LTA at its current level of £1,073,100 in this year's Spring Budget.

What do you think about the issues raised by this story? Email us on to let us know