NHS waiting lists surge – Tilney comments on the pensions row

It has been revealed that waiting lists for routine surgery have risen by up to 50% in England as clinicians are boycotting extra shifts due to pension tax charges resulting from the tapered pension allowance imposed on high earning professionals in 2016. This has landed doctors and consultants with hefty and often unexpected tax charges. Gary Smith, chartered financial planner at Tilney, comments on the ongoing crisis:

“The Chancellor Philip Hammond has ruled out scrapping the tapered pension allowance, but has proposed making the NHS scheme more flexible, with a mooted 50:50 arrangement that would allow members to reduce the amount put in their pension to avoid the tax charges.

“However, our analysis shows that while such a move might help address the issue of tax charges, it would leave senior NHS staff no better off than if they incurred the tax charges, so is little more than a mirage.

“The likelihood of a new Chancellor being appointed following the imminent change of Prime Minister might be an opportunity for a more fundamental rethink on the tapered allowance – introduced by George Osborne – which is widely perceived as unfair. While controlling the cost of pension tax relief is understandable for Government, there are much simpler solutions, like a lower annual allowance or a flat rate of relief for all.”