Matt Hancock asks doctors not to retire early over the pension crisis

Health Secretary Matt Hancock begs doctors not to retire early over the NHS pension crisis and says he will ‘fix the problem’ by next year

  • Many doctors are trying to avoid big tax bills from stricter pension rules 
  • Hancock urged they take ‘no precipitate action in terms of early retirement’ 
  • Consultants are said to be refusing extra shifts to protect their pensions 

Health Secretary Matt Hancock is pleading with doctors not to retire early because of the NHS pension crisis.

Many medics are trying to avoid big tax bills from stricter pension rules that put a cap on their saving allowances. 

Mr Hancock has reassured big earners within the health service that changes to the lifetime allowance will be ‘fixed’ before April.

In the meantime, he is asking the consultants and managers to ‘take no precipitate action in terms of early retirement’. 

This comes just a week after health leaders warned operations are being cancelled and cancer scans left unread because doctors refuse to take on more work to protect their pensions.

Health Secretary Matt Hancock is pleading with doctors not to retire early over the NHS pension crisis. He is pictured arriving for a cabinet meeting at Downing Street in June

‘For people who are affected by the lifetime allowance, I would strongly recommend they take no precipitate action in terms of early retirement, because we are going to fix this problem,’ Mr Hancock said.

‘And for people affected by the annual allowance, I understand the problem.

‘But we need to make sure we find solutions urgently so people can do the work they want to do and the NHS needs them to do,’ The BMJ reported. 

Mr Hancock has vowed to consult with NHS officials and the treasury to fix the ‘very serious’ pension problem by the start of the next financial year, which is April 6.

On June 3 this year, the Government proposed the so-called 50/50 scheme as a solution. 

This will allow senior doctors to put less into their pension for up to a decade to reduce their risk of the pot hitting the £1.1milion ($1.3m) lifetime limit. 

The NHS’ existing pension scheme does not allow staff to choose the rate their pot builds and the highest-earning consultants have contribute 14.5 per cent of their pensionable pay a month.


More than half of GPs plan to quit the NHS before retirement age, a survey has revealed.

Out of the 940 GPs surveyed by Pulse, 498 (53 per cent) claimed they are planning to retire early due to issues with their pension, ‘unsustainable’ workloads and burnout.

Some doctors said they would ideally retire early but cannot afford it. 

One GP said: ‘I cannot envisage being able to work until I am 69 in this job, it’s unsustainable. 

‘Why else are so many younger GPs choosing portfolio careers as a way to avoid burnout?’

A locum GP added changes are making the payments to her pension pot ‘affordable’. 

The British Medical Association said the results are unsurprising and show the ‘challenging circumstances’ GPs face.

However, support for the 50/50 plan wavered after NHS trusts announced last week staff are refusing to work extra hours due to the financial penalties of paid overtime. 

Mr Hancock acknowledged more action is needed besides the 50/50 proposal at a Commons Health and Social Care Committee meeting on Tuesday.

‘The BMA [British Medical Association] make a case the [50/50 scheme] doesn’t solve all of the problems – I’ve heard that case,’ he said. 

Mr Hancock added the Government will shortly be publishing a consultation paper with open questions on how to resolve the problem by next year. 

Full-time doctors are typically contracted to work 10 shifts, each lasting four to five hours, a week. 

However, consultants usually go above and beyond this by doing 11 or 12 shifts to keep up with demand. 

The trade association NHS Providers was told by hospital trusts that consultants and senior managers are increasingly turning down shifts in what has been called an ‘immediate, major problem’. 

A recent poll of senior staff by NHS Employers found more than four in 10 have reduced their additional work because of the impact of pension tax charges, and some have even retired. 

This has had a massive impact on patient care, with one hospital experiencing a 50 per cent rise in the number of people waiting for routine surgery since April. 

The Royal Bournemouth hospital in Dorset has said it may have to cancel up to 150 operations that are scheduled to take place before July 27.

This comes after none of its consultant anaesthetists have signed up to attend the procedures.

At another hospital, 4,500 patients have been waiting more than 18 weeks for a planned operation, which is meant to be the maximum wait time. 

A&E and acute medical care have reportedly also been hard hit, particularly over the past few months.  

NHS Providers’ chief executive Chris Hopson, said: ‘Trust leaders report they have had significant numbers of key clinical and managerial staff saying they can no longer afford to work extra shifts and weekends.

‘[This is] because of the financial penalties involved in doing so, due to the way the pension taxation rules currently work.’  

‘This is now an immediate, major problem for the NHS. Trust leaders are saying the impact is growing rapidly.

‘We have multiple trusts telling us they are expecting a significant increase in the number of surgery cases they will have to delay, leaving patients in pain and risking their problems getting much worse.’ 


The NHS introduced changes to its pension plan in 2016.

This means senior staff are now more likely to suffer an annual tax charge on their pension contributions, as well as a lifetime allowance charge on their overall pension pot. 

Pension contributions are not taxed so long as they do not exceed annual or lifetime allowances. 

People of all professions usually pay tax on their pension if the total contributions for that year exceed the annual allowance (AA), which is currently £40,000 ($49,793).

And if the pension pot is worth more than the lifetime allowance, which is currently £1,055,000 ($1,315,310), a person will also pay tax on it.

Although the AA has been £40,000 since 2014, it can go to as low as £10,000 ($12,447) if a person is subject to tapering. 

In the NHS pension scheme, the amount a person puts in each year is multiplied by a factor of 16-to-19. Therefore small increases in pensionable pay can generate very large growth.

Tapering occurs when the taxable income exceeds £110,000 ($137,142).

If the income is more £110,000, a person needs to calculate their adjusted income.

If this is more than £150,000 ($187,026), the AA tapers by £1 ($1.24) for every £2 ($2.48) that their adjusted income is above £150,000.

In the case of a consultant with a pension growth of £100,000 ($124,673) but a threshold income of £110,000, they retain a standard AA.

But even as little as £1 of additional income would result in AA reducing to the minimum of £10,000. 

This £1 of extra income could increase the tax payable by £13,500 ($16,811).  

Many consultants only realised this years later. The BMA predicts 30 per cent of the medics have been affected.  

Opting to earn less causes a medic’s pension pot to grow more slowly, which reduces their risk of being hit with a tax bill.  

Full-time doctors are typically contracted to work 10 shifts, each lasting four-to-five hours, a week.

However, consultants usually go above and beyond this by working 11 or 12 shifts to keep up with demand. 

They get paid overtime for this additional work, which can then affect their pension. 

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