Fears about the tapered annual allowance on their pensions means that one in five consultants have reduced regular overtime and a quarter of GPs have cut their hours. 

Pension taxation is preying on the minds of senior consultants and GPs who have cut their hours over fears about pension taxation.

A new survey from the British Medical Association (BMA) of more than 5,000 doctors found that significant numbers of senior doctors have reduced their work commitments by such an amount that, if replicated across the wider workforce, would be equivalent to the loss of around 5,400 full-time consultants or around 10% of capacity that could be offered to the NHS in England. 

For GP partners, the reduction in hours represents a potential loss of around four million appointments. 

“It is an absurd situation when the government is promising to bring down near-record waiting lists, yet doctors are being forced by complex and unfair pension tax rules to turn down or reduce extra work,” said BMA pensions committee chair Vishal Sharma. 

Tapered allowance

The problem largely centres on the tapered annual allowance. The standard annual allowance is the amount by which doctors’ pensions can be deemed to grow before being subject to additional tax charges. 

The taper is a mechanism in which this allowance decreases when doctors’ earnings exceed certain thresholds. This taper can be triggered by taking on extra work, such as initiatives to clear waiting lists. 

The BMA argues that this creates what it calls a “cliff edge” where earning as little as £1 more can result in an additional tax bill of £22,500. This would mean, it says, that the doctor would be paying to work. 

Almost all of this extra work is non-pensionable, meaning it also does not result in increased pension benefits on retirement.

In the survey 21% said that they had reduced their “regular overtime” this year due to the tapered AA; 24% had reduced their ad hoc overtime sessions to clear waiting lists for the same reason; and 23% of GPs had reduced their regular workload this year. 

“These survey results, from more than 5,000 doctors in the UK, show that this a real, not hypothetical, issue affecting the capacity in hospitals and GP practices right now,” said Sharma.