Senior NHS clinicians could be offered an option to halve their pension contributions in exchange for also halving the rate of pension growth.
In its Interim NHS People Plan, published yesterday (3 June), the Department of Health and Social Care (DHSC) and the Cabinet Office outlined suggested policies to make NHS pensions "more flexible" for high-earners of the NHS Pension Scheme who are delivering frontline care.
The government said senior clinicians will be able to support more patients while saving into their NHS pension without facing significant tax charges, amid concerns from GPs and other medical practitioners around how the lifetime allowance limits their incentive to save into a pension fund.
The lifetime allowance was reduced from £1.25m to £1m in 2016, and has since been uprated with inflation, rising to £1.05m in April. There had been concern that the potential for lifetime allowance breaches was causing NHS staff to work fewer hours in order to reduce their pension contributions.
The government said it will soon consult on whether senior clinicians should be offered the option to allow them to build their NHS pension "more gradually" over their career by making "steadier contributions" towards their pension without facing regular, significant tax charges.
It said it will continue to examine the evidence on how this specific issue also affects other public sector workforces.
Health and social care secretary Matt Hancock said the country is losing experienced people early due to "frustrations over pensions", and that the government is "determined to find a solution that better supports out senior clinicians".
He added: "The reforms we are setting out will give clinicians greater flexibility to manage their pensions, have more control over their future, and offer a deal that's fair to doctors, taxpayers, and the patients they care for."
In April, the British Medical Association warned chancellor Philip Hammond that without reforms to the NHS Pension Scheme rules, doctors would reduce their working hours.
The pensions industry has also called on the government review the myriad pensions allowances on various occasions. Barnett Waddingham senior consultant Malcolm McLean previously noted that together they were a "very toxic mix and a recipe for muddle and confusion".
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