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Annual allowance rules prompt pension crisis talks in NHS

Emergency talks are being held today after it emerged NHS consultants have been cutting their working hours to avoid tax bills on their pensions, the Financial Times reports

Annual allowance rules prompt pension crisis talks in NHS

Emergency talks are being held today after it emerged NHS consultants have been cutting their working hours to avoid tax bills on their pensions, the Financial Times reports.

According to the paper, the chair of NHS Improvement, which oversees NHS trusts, and the British Medical Association are meeting today to try to find a way to solve a crisis that has been fuelled by pension tax relief rules.

The FT has previously revealed how consultants have refused to take on extra work for fear it would push their annual pension contributions over the limit for what can be given tax relief, triggering a bill.

The tax charges are the result of the tapered annual allowance. Anyone with a threshold income in above £110,000 in any tax year will have their adjusted income tested to see if it exceeds excess £150,000.

If it is, their annual allowance for making tax-relieved pension contributions is reduced by £1 for every £2 of adjusted income over this level, until the minimum annual allowance level of £10,000 is reached.

One 50-year-old emergency medicine consultant the FT spoke to said he had avoided additional shift work after getting a £35,000 tax bill.

A senior histopathologist told the paper they had written to their MP about the issue ‘explaining that patients on a cancer pathway will not have their histology reported in a timely fashion and this leads to delays in planning treatment’.

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