Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential effect of pension tax rules have on the (a) working hours and (b) levels of retirement of doctors in the NHS.

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 and lifetime allowances help 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, while 91 per cent of individuals currently approaching retirement have a pension below the lifetime allowance.

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:

• Changing pension rules regarding inflation
• Encouraging NHS Trusts to explore local solutions for senior clinicians affected by pension tax charges, such as pension recycling
• Implementing permanent retirement flexibilities and extending existing temporary measures to allow our most experienced staff to return to service or stay in service longer.

At Autumn Statement 2022, the Chancellor announced the Government will introduce measures to support and grow the NHS workforce and improve performance across the health system. To support this the government committed to publishing a comprehensive NHS workforce strategy, including independently verified workforce forecasts, next year.