Question to the Department of Health and Social Care:

To ask the Secretary of State for Health and Social Care, what estimate he has made of the number of doctors affected by the changes in the annual allowance tax; and if he will make a statement.

The Department recognises that the annual allowance may contribute to decisions from National Health Service consultants to retire early or limit their NHS commitments, although a precise estimate of the change in the number of hours worked is not available.

The tapered annual allowance calculation takes into account non-pensionable earnings and all taxable income, it is therefore not possible to make an assessment of the number of breaches of the tapered annual allowance.

We are, however, listening carefully to concerns raised by senior doctors and NHS employers about the tapered annual allowance.

The Department has consulted on introducing flexibility within the NHS Pension Scheme from 2019/20 to allow clinicians affected by annual allowance tax charges to reduce their pension accrual in deciles in order to manage any potential annual allowance tax charges.

In September 2019 guidance was issued by NHS Employers informing employers of the short-term approaches that they could take to mitigate the effect of pension tax on their workforce this tax year. The NHS has also implemented an immediate measure to preserve clinical capacity amid the increased pressure on services during the winter period. This will compensate NHS clinicians for the effect on their pensions of annual allowance charges incurred in 2019/20.

As part of a wider drive to ensure the NHS has the staff it needs to meet demand and transform care, the Government is carrying out an urgent review of the pensions annual allowance taper problem that has caused some doctors to turn down extra shifts for fear of high tax bills. Ministers at HM Treasury and the Department for Health and Social Care have met the Academy of Medical Royal Colleges and the British Medical Association as part of this review to set a long-term solution. The review will report at budget.

The review will also consider the findings from the Department’s consultation on pension flexibility and the Department expects to set out its response to the consultation early in 2020.