NHS Pensions: Taxation

Philippa Whitford Excerpts

Monday 8th July 2019 Commons Chamber

[Elizabeth Truss]

My right hon. Friend makes an interesting point. In general, I am in favour of lower taxes and a simpler tax system that always rewards those who go out to work.

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

Tapering lifetime allowances have already driven many senior doctors out of the NHS in their late 50s. The issue now is the tapering annual allowance, which is reduced by £1 for every extra £2 earned. This issue was raised in 2017; it has not just come to light. In May, the Chancellor talked about a threshold of £150,000, yet the problem kicks in at £110,000, and many senior consultants and GPs earn above that. The average extra bill is £18,500, but many have faced tax bills of almost £100,000. The British Medical Association survey shows that three quarters are citing this as a reason to retire. At the moment all income, including non-pensionable income, is included. That does not make sense, so can that be changed? It is not just earnings, but the growth of a pension, yet people might not live long enough for that to be income, so why is it counted? The BMA does not think that the 50:50 approach will solve the issue, so will the Treasury have open consultation and, because this is about interaction with the pension system, look at all the options? Otherwise, we will face a workforce meltdown.

[Elizabeth Truss]

As I said, the consultation will be launched fairly soon—the Health Secretary is looking at that—and people will of course be able to feed their views into it.