Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of creating a tax unregistered pensions scheme for senior NHS officials to help support the retention of NHS consultants who would otherwise retire early to avoid high tax costs.
Pensions tax relief is one of the most expensive reliefs in the personal tax system. In 2020/21 Income Tax and employer National Insurance Contributions relief cost £67.3 billion. The annual allowance helps to ensure that the highest earning pension savers do not receive a disproportionate benefit. 99 per cent of pension savers make annual contributions below £40,000, the level of standard annual allowance which has applied from 2014/15.
An unregistered scheme for the NHS would not benefit the vast majority of NHS staff, as members would receive no tax relief on their contributions.
The Government is committed to ensuring that hard-working NHS staff do not find themselves reducing their work commitments due to the interaction between their pay, their pension, and the relevant tax regime. On 22 September, the Government announced it will change elements of the NHS Pension Scheme to help retain doctors, nurses and other senior NHS staff, to increase capacity. These changes include: