Question to the Department of Health and Social Care:

To ask the Secretary of State for Health and Social Care, what assessment he has made of the potential impact of the annual allowance threshold on trends in the levels of extra work taken on by (a) GPs and (b) consultants.

From 6 April 2023, the standard annual allowance threshold increased from £40,000 to £60,000, giving individuals scope for greater tax-free pension growth. The tapered annual allowance further restricts the amount of tax-free pension saving available to the very wealthiest in society. The taper applies when taxable earnings reach £200,000.

A range of factors may influence personal decisions around intentions to take on extra work, making it difficult to measure the unique impact of tax measures. There is no clear evidence from National Health Service payroll data that the annual allowance pension tax regime constrains the activity of the consultant workforce in aggregate. Given measurement difficulty, no assessment has been made on the impact of the annual allowance pension tax regime on general practice activity, or consultant activity at specialty level.

Where NHS Pension Scheme members do incur annual allowance pension tax charges, these do not have to be met in the current tax year. The NHS Pension Scheme offers a Scheme Pays facility through which individuals can ask the scheme to pay the tax on their behalf in exchange for a fair reduction in the generous pension benefits paid at retirement.