Hospitals are being forced to cancel operations because of ‘absurdly complex’ NHS pension rules, health leaders have warned.
NHS Providers deputy chief executive Saffron Cordery said the problem has now reached ‘crisis point’.
Senior doctors are effectively being ‘incentivised to cut their hours or quit their jobs’ due to the rules, she warned.
Her concerns were echoed by the British Medical Association (BMA), whose reps have met ministers to demand immediate action.
NHS pensions changes in 2016 have impacted high earners due to the introduction of a tapered annual allowance.
NHS Providers deputy chief executive Saffron Cordery said the problem has now reached ‘crisis point’
It has cut the tax-free pension allowance of those earning more than £110,000 a year from £40,000 to £10,000.
If a doctor earns more than £110,000 any pension contribution they make above the £10,000 cap triggers a tax charge of 55 per cent.
This means NHS staff who accidentally breach the cap can be hit with bills of tens of thousands of pounds.
Doctors say that because they often work overtime it is more difficult for them to keep track of how close they are to breaking the £110,000 threshold.
They also cannot put their overtime income towards their pension – so by working extra they can bust their pension tax allowance, without making any savings.
Consultant-grade doctors earn a basic salary of £77,913 to £105,042 per year, according to NHS data.
Ms Cordery said: ‘The problems caused by the way the annual and lifetime pension limits are working in the NHS have been mounting for some time.’
She added they ‘are now reaching a crisis point’, calling for policymakers to push through an ‘immediate solution to the problems.
‘Severe workforce shortages, combined with a relentless rise in demand for care, mean frontline staff are already overstretched,’ Ms Cordery said.
‘Yet many of our most senior and experienced staff, including doctors, are effectively now being incentivised to cut their hours or quit their jobs.
‘In the last month, the number of trusts telling us they are having to postpone operations… as a result of these issues has risen significantly.’
She added that hospitals have told NHS Providers they are ‘worried about their ability to provide high quality, safe care’ and meet key national targets.
Dr Rob Harwood, chairman of the BMA’s Consultants Committee, agreed there is no ‘quick fix’ to the situation.
But he added the union have not seen any action from the Government ‘to bring an end to the situation’.
He said it is now impact patients and their care ‘as doctors simply cannot afford to work the extra hours to cover vacant shifts and reduce waiting lists’.
Dr Harwood said: ‘The BMA is very clear on the solutions and mitigations that are needed to bring an end to this spiralling crisis.’
He added the union had, once again, written to Health Secretary Matt Hancock asking for an end to the tapered annual allowance.
‘Without this crucial step, many trusts will soon see their most senior experienced doctors either reduce their hours or simply leave,’ he added.
A poll for the BMA earlier this year found that many doctors were being driven to cut hours and retire early.
Six out of 10 of the 4,000 consultants in England revealed early retirement plans, with many blaming the penalties caused by pensions arrangements.
Fewer than one in 10 consultants (6.5 per cent) planned to continue working after the age of 65 and a third planned to halve their workload.
Sir Steve Webb, director of policy at Royal London and former pensions minister, slammed the tapered annual allowance.
He said: ‘When complex pension tax relief rules means that doctors are retiring early or turning down shifts, the case for change becomes overwhelming.
‘Doctors should be able to focus on their patients and not have to spend hours working out if by taking on more work they risk a huge tax bill.
‘Merely tinkering with the NHS pension scheme would simply be a ‘sticking plaster’ solution.
‘The root cause is the absurdly complex ‘tapered annual allowance’ which needs to be abolished as a matter of urgency.’
Earlier this month, Chancellor Philip Hammond said he was in talks with Mr Hancock on how to provide additional pension flexibility for NHS doctors.
He told Parliament the allowance is focused on the highest-earning pension savers to ensure the tax relief they receive ‘is not disproportionate to that of other savers’.
‘However, I do accept that there is some evidence that the annual allowance charge is having an impact on the retention of high-earning clinicians in the NHS,’ he added.
SO THAT’S WHY YOU CAN’T SEE YOUR DOCTOR
A record 138 GP surgeries shut down last year as millions struggled to secure appointments.
They closed at the rate of more than two a week, affecting more than 500,000 patients.
As recently as 2013, just 18 surgeries shut across the UK. By last year that number had increased nearly eight-fold, according to figures released today.
It means that over the last six years, 585 practices have gone – covering a population of nearly 1.9million.
The closures come just as pressure on GPs is increasing because the population is both growing and ageing.
Experts believe the rate of surgery closures is accelerating because rising numbers of under-pressure doctors are opting for early retirement – or deciding to abandon their careers.
At the same time, managers are finding it much harder to fill the empty posts and in many cases have no choice but to permanently shut their doors, or merge with another surgery.
More GP surgeries are shutting down than ever before as shocking figures show 138 closed their doors in 2018, a stark rise from 18 in 2013