NHS Pensions and Staffing

Debate between Dan Poulter and Philippa Whitford

Wednesday 13th July 2022 Commons Chamber

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests as a practising NHS hospital doctor, although I am not personally affected by the issues I am about to raise.

I think we would all agree that following the pandemic, the NHS is facing unprecedented challenges in delivering patient care. The current demands on the system are too high to be met by the existing workforce and resources alone, and while the Government rightly seek to increase the NHS workforce by training more doctors, nurses and other frontline clinical staff, it is equally vital that we retain the existing workforce. Simply put, losing senior and experienced staff at this time would be an unmitigated disaster for the NHS and the patients it serves.

One of the biggest threats to the retention of the most senior and experienced NHS staff is the punitive and unfair interplay between long-standing Government pension taxation policies and the NHS pension scheme. Those policies, and the punitive financial penalties that result from them, will cause many senior NHS workers to take drastic steps such as reducing hours, leaving leadership roles or taking early retirement. These pension penalties will result in senior and long-serving NHS workers aged 59 or 60 potentially losing over £100,000 from their pension pot if they delay retirement by one year, rather than retiring this year. That is resulting in senior and experienced NHS workers being advised by actuaries and accountants to reduce their working hours in order to avoid being hit by huge pension tax bills that will see them working for little pay, or in some cases no pay at all.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

Obviously, I too was a doctor until recent years.

This is an issue for all four health services across the UK, and is taking away people with the knowledge, skills and experience to not just look after patients but teach. Is the underlying problem not that when this policy was introduced in 2015, the talk was about preventing tax avoidance? It is not possible to play games with a final salary scheme. It was never open to doctors to play games with their pension, and therefore it is simply the wrong policy for the wrong group of people.

[Dr Poulter]

The hon. Lady is absolutely right. There were some further unintended consequences of the Finance Act 2004, which I will come to in a moment, but doctors, nurses and healthcare professionals cannot chose the rate at which they contribute to their pensions—they have to contribute at a fixed rate. There is no choice, so unintentionally, we find ourselves in a situation where senior healthcare professionals are facing punitive, eye-watering annual charges on their pensions worth tens of thousands of pounds. That cannot be right.