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Member of Parliament for West Aberdeenshire and Kincardine
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NHS Pensions, Pension Tax (Feb 2020)

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I know that retaining and encouraging experienced, valued and hardworking consultants and GPs is absolutely a priority for the Government.

For the majority of savers, pension contributions are tax-free. This makes pension tax relief one of the most expensive reliefs in the personal tax system. The reforms to the lifetime and annual allowance made in the previous two Parliaments are expected to save over £6 billion per year, and are necessary to deliver a fair system and to protect public finances. Less than 1 per cent of savers will have to reduce their saving or face an annual allowance charge as a result of the tapered annual allowance.

NHS doctors are impacted by these reforms like all other individuals. However, the Government recognises they have limited flexibility over their pay and pension arrangements compared to those in the private sector and this is impacting decisions on workload.

I’m pleased the Government is listening to concerns raised by doctors that pension tax charges are driving decisions to retire early or limit their NHS commitments. The Department of Health and Social Care brought forward a public consultation on targeted proposals to make NHS pensions make flexible for senior clinicians. The consultation set out proposals that would allow senior clinicians to set the exact level of pension accrual at the start of each year. This would give them room to take on additional work without breaching their annual allowance and facing tax charges. Employers would then have the option to recycle their unused contribution back into the clinician’s salary. The proposals follow the commitment made in the NHS People Plan to deliver a fairer and more flexible approach to the NHS Pension Scheme for Senior Clinicians.

For more information, please find detailed guidance at the following link:

https://www.nhsemployers.org/case-studies-and-resources/2019/09/nhs-pen…

I will continue to follow this matter closely; the consultation has now closed and the Government is now analysing feedback.
 

Policy and Campaign Opinion

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  • Domestic Abuse Bill (Feb 2020)
  • Driving in the EU post Brexit (Jan 2020)
  • Food Standards and Trade (Feb 2020)
  • HS2 and the Environment (Jan 2020)
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  • IR35 Update (Jan 2020)
  • Immunity for Soldiers (Jan 2020)
  • Impact of EU exit on NHS (Jan 2020)
  • Loan Charge Planned Changes (Jan 2020)
  • Lords Amendment ref Child Refugees (Jan 2020)
  • NHS Pensions, Pension Tax (Feb 2020)
  • Protect the Oceans (Feb 2020)
  • Sanctions Regime Post Brexit (Feb 2020)
  • Support for Veterans (Feb 2020)
  • Transgender Equality (Feb 2020)

Andrew Bowie MP, Conservative Member of Parliament for West Aberdeenshire and Kincardine

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