Quilter has written to the health secretary warning the NHS faces ‘a perfect storm’ unless it extends the scheme pays deadline and the end of the abatement rules.
In a letter sent by Quilter, the firm asked health secretary Steve Barclay to extend the 2020/21 NHS Scheme Pays deadline, which is currently set for July 31, and to continue the extension of the end of abatement rules.
Scheme pays allows savers to settle annual allowance tax charges through their NHS pension without needing to find cash upfront.
While the government has lifted the ‘adjusted income’ and ‘threshold income’ levels under the tapered annual allowance by £90,000, the standard annual allowance of £40,000 is still an issue for some doctors, Quilter has said.
The wealth manager argued extending the deadline would ensure affected doctors are able to exercise the option to use scheme pays.
In addition, the suspension of abatement rules, introduced during the pandemic, allowed recently retired NHS staff to return to work and tackle the pandemic and backlog without suffering a penalty on their pension.
The temporary suspension comes to an end on 31 October 2022, having already been extended after it was due to end on 24 March 2022.
Quilter said once the rules end NHS workers’ pension will be reduced pound for pound if their earnings plus the ‘unearned’ element of their NHS pension, exceed their pre-retirement NHS pensionable earnings.
Quilter’s NHS pensions specialist, Graham Crossley said healthcare workers are suffering penalties on their pensions or not being given adequate time to file complicated pension tax paperwork when they have other things front of mind like “helping the health service get back on its feet.”
“Doctors are risking their lives and the least we can do is ensure they are not being financially penalised for it," Crossley said.
“Time is ticking before thousands of the NHS’s most senior doctors and nurses are forced to choose between continuing to treat patients or suffer a penalty on their pension. It is absurd that a raft of experienced professionals may leave the sector come autumn simply because the government hasn't extended the cessation of abatement rules."
Quilter’s request comes after the Health and Social Care committee published a report yesterday (July 25) outlining how senior medical staff were both reducing their hours and retiring earlier because of concerns about pensions.
Referencing a recent survey by the Royal College of Surgeons of England, the report found that 69 per cent of respondents had reduced the amount of time they spent working in the NHS as a direct result of changes to pension taxation rules.
Last week, the Review Body on Doctors’ and Dentists’ Remuneration also urged the government to review NHS staff pensions, warning that the recruitment and retention of senior doctors and dentists is being influenced by these issues.