GPs’ Lifetime Allowance has been scrapped as part of sweeping changes under Jeremy Hunt’s 2023 Spring Budget.
Annual allowance has been raised to £60,000, negative pension growth can now be offset and minimum tapered annual allowance has been increased to £10,000, amongst other changes.
Speaking on behalf of the Association of Independent Specialist Medical Accountants, Andrew Pow said: “The increase in the annual allowance on pension savings is welcome. Together with the recent announcement on retirement flexibilities and plans to remove the impact of inflation within the annual allowance calculation, this is a positive and long overdue change.
“While some high-earning GPs will continue to be impacted by annual allowance charges, the changes announced in the Budget mean that the vast majority of GPs will no longer be affected.
“The abolition of the lifetime allowance, which means the lifetime value of pensions can grow without additional tax charges, may result in more GPs and consultants considering continued NHS service rather than taking early retirement.
“While some issues remain, the Budget announcement represents a positive step which will ensure our senior clinicians can now be less concerned with pension tax issues as their careers progress.”
On Wednesday 15 March, the day of the budget, the chair of the BMA Pensions Committee and chair of the Consultants Committee Dr Vishal Sharma said: “Today’s announcement is an incredibly important step forward and the result of year after year of lobbying and campaigning for changes to pension taxation by the BMA. The scrapping of the lifetime allowance will be potentially transformative for the NHS as senior doctors will no longer be forced to retire early and can continue to work within the NHS, providing vital patient care.”
Dr Richard Fieldhouse, NASGP chair, said: “Having been regularly updating our members for many years about the problems around the NHS Pension lifetime allowance, we are left with an almost Stockholm syndrome-like feeling knowing that we are now free of being held to ransom by a ridiculous self-defeating set of cumbersome rules.
“As well as being welcomed by many colleagues who will have been personally affected by this, it should also head off long-term clinical workforce and capacity problems, as LTA is now no longer a reason for many doctors to leave the NHS earlier than originally anticipated.
“This is indeed a huge achievement, particularly by the BMA in their long standing campaign to bring this to the government’s attention.”