UK proposes NHS pension plan reform in effort to stop staff quitting

The UK is seeking to overhaul the NHS retirement scheme in an effort to draw back thousands of retired staff and keep doctors from quitting over pension tax bills as patient waiting lists soar to records.

The government on Monday said it aimed to make it more attractive for staff who have left the health service to “come back” by allowing them to rejoin the NHS pension plan, which offers guaranteed indexed benefits.

It is also proposing to reform access to the NHS pension plan so that primary healthcare workers — such as GPs, general practice nurses and clinical pharmacists — can join the retirement scheme, which has more than 1mn members. Previously these groups have had to apply for time-limited access on an ad hoc basis, the government said.

In an effort to prevent staff from leaving, a partial retirement option is to be introduced; that would give older staff the opportunity to draw down part of their pension, while staying in work and building up their pot.

The government also pledged to “fix” pension scheme rules that have landed some senior clinicians and NHS staff with large tax bills because of the way the health service’s pension accounts for inflation.

“The generous NHS pension scheme is one of the best in the country, but it’s not working as it should for everyone,” said Steve Barclay, health secretary.

“We need a system where our most experienced clinicians don’t feel they have to reduce their workload or take early retirement because of financial worries. I also want to make it easier for staff that want to return to work to support the NHS to be able to do so without penalties.

“These proposed changes will help open up extra appointments so patients can see their GP and consultants more quickly,” added Barclay.

The changes come as official data found that the number of patients waiting for treatment in September had hit a record 7mn, with the British Medical Association saying the backlog would take “years to clear”.

However, the government did not propose any changes to the lifetime or annual pension savings allowances, which limit what can be saved or grown in a pension before tax charges can apply.

Doctors’ unions had lobbied for reforms, saying members were being landed with punitive pension tax bills for breaching their allowances after working extra hours to help clear backlogs or accepting promotions.

“The partial retirement option and greater flexibility for recently retired doctors returning to the workforce have potential benefits and in particular will standardise retire and return arrangements,” said Vishal Sharma, chair of the BMA’s pension committee.

“However, this does not directly address the issues caused by the annual or lifetime allowance,” he added. “Doctors will still have to consider reducing the work they do to prevent incurring large punitive tax bills and it is disingenuous of the government to suggest that this will make any meaningful difference to the huge backlogs in care.”

According to a recent BMA survey, more than 40 per cent of consultants said they planned to leave the NHS in some capacity over the next 12 months. The doctors’ union said the situation was “just as stark for GPs and other senior doctors”.

The reforms, which are subject to an eight-week consultation, are not expected to be implemented until late spring 2023, the government said.