Operations postponed because of NHS pensions ‘crisis’, medical leaders warn

Problems caused by NHS pension rules have reached “crisis point”, with hospitals forced to postpone operations, health leaders have warned.

NHS Providers deputy chief executive, Saffron Cordery, said senior doctors are effectively “incentivised to cut their hours or quit their jobs” due to the rules, which is impacting on patient care.

Her concerns were echoed by the British Medical Association (BMA), whose representatives have met ministers to demand immediate action.

NHS pensions changes in 2016 have impacted high earners due to the introduction of a tapered annual allowance.

This is a taxation threshold which restricts the amount of pension growth individuals are allowed each year before tax charges apply.

It gradually reduces the allowance for those on high incomes, meaning they are more likely to suffer an annual tax charge on contributions and a lifetime allowance tax charge on their benefits.

The tapered annual allowance means that for every £2 of income above £150,000 a year, £1 of annual allowance is lost.

Health leaders say the rules mean the NHS’s most senior and experienced staff are being pushed to leave, work part-time or refuse extra shifts.

Ms Cordery (pictured) said: “The problems caused by the way the annual and lifetime pension limits are working in the NHS have been mounting for some time but are now reaching a crisis point.

“Severe workforce shortages, combined with a relentless rise in demand for care, mean frontline staff are already overstretched.

“Yet many of our most senior and experienced staff, including doctors, are effectively now being incentivised to cut their hours or quit their jobs.

“In the last month, the number of trusts telling us they are having to postpone operations, cancel diagnostic sessions or are struggling with A&E performance as a result of these issues has risen significantly.

“They tell us that they are now becoming worried about their ability to provide high quality, safe, care and meet key national cancer, diagnostic and elective surgery targets and that current, real time, performance data reflects this.

“We know national policymakers have been working hard to address these challenges but we really must have an immediate solution to these problems.”

Dr Rob Harwood, chairman of the BMA’s Consultants Committee, said: “The BMA is very clear on the solutions and mitigations that are needed to bring an end to this spiralling crisis.

“Whilst we agree there is no ‘quick fix,’ we are not seeing any action from the Government to bring an end to a situation which is now beginning to directly impact patients and their care as doctors simply cannot afford to work the extra hours to cover vacant shifts and reduce waiting lists.

“Only this week, we have once again written to the Secretary of State for Health and Social Care asking that he immediately brings and end to the tapered annual allowance for defined benefit schemes as this remains the only realistic solution to this problem.

“There are other supporting measures but without this crucial step, many trusts will soon see their most senior experienced doctors either reduce their hours or simply leave.”

A poll for the BMA earlier this year found that many doctors were being driven to cut hours and retire early.

Six out of 10 of the 4,000 consultants in England responding to the survey revealed early retirement plans, with many blaming the penalties caused by pensions arrangements.

Fewer than one in 10 consultants (6.5%) planned to continue working after the age of 65 and a third planned to halve their workload.

Earlier this month, Chancellor Philip Hammond told Parliament: “The tapered annual allowance is focused on the highest-earning pension savers to ensure that the tax relief that they receive is not disproportionate to that of other savers.

“However, I do accept that there is some evidence that the annual allowance charge is having an impact on the retention of high-earning clinicians in the NHS.”

He said he was in talks with Health Secretary Matt Hancock on “how to provide additional pension flexibility for NHS doctors affected by the annual allowance tax charge”.

Sir Steve Webb, director of policy at Royal London and former pensions minister, said: “When complex pension tax relief rules means that doctors are retiring early or turning down shifts, the case for change becomes overwhelming.

“Doctors should be able to focus on their patients and not have to spend hours working out if by taking on more work they risk a huge tax bill.

“Merely tinkering with the NHS pension scheme would simply be a ‘sticking plaster’ solution.

“The root cause is the absurdly complex ‘tapered annual allowance’ which needs to be abolished as a matter of urgency”.

Copyright (c) Press Association Ltd. 2019, All Rights Reserved. Picture (c) NHS Providers.