Government raises annual allowance for pensions

As reported by the BBC, senior doctors in the BMA have welcomed the end to the NHS ‘pension trap’ for the majority of doctors, following a pledge to increase the annual allowance announced in the Budget

Under plans set out by chancellor Jeremy Hunt, the tax-free annual allowance for pensions will rise to £60,000 while the lifetime allowance will be scrapped entirely.

The changes, which have come following years of campaigning by the BMA, mean that a significant number of senior doctors will no longer be subjected to punitive tax rules regarding how much they accrue within their pensions.

Levies applied to pension contributions have in recent years seen increasing numbers of consultants and other senior doctors forced to reduce their working hours or take early retirement in order to avoid being charged for working, at a time when the NHS staffing shortage is at crisis level.

Responding to the budget, BMA pensions committee and consultants committee chair Vish Sharma welcomed what he described as decisive action towards addressing the punitive pension rules that were threatening to exacerbate the NHS workforce crisis.