Surgeons advised to cut overtime due to potential effect on pensions
29 October 2019
The Financial Adviser has published an article relating to the advice provided to consultant surgeons to reduce the amount of overtime they work due to the potential detrimental affect it could have on their pensions.
61% of those who responded to a survey which collated information from 1,890 members of the Royal College of Surgeons of England confirmed that they had received advice that recommended that they do not work overtime or help with any plans to lower waiting list times. This was due to the impact that it could have on their pension pots because of the introduction of the tapered annual allowance back in 2016. The taper dictates that, for every £2 of adjusted income exceeding £150,000, £1 of annual allowance is lost. The results of the survey have raised concerns as the current NHS waiting list stands at 4.41 million, which is the largest it has ever been. The advice being given by legal and financial advisors can only serve to inflate those figures.
68% of the participants admitted to considering taking early retirement due to the implications surrounding the pension taxation rules. A consultation into new pension rules, intended to apply from April 2020, has been published by HMRC and is open until 1 November 2019. The new proposals mean that affected individuals could set their own accrual percentage rates, in increments of ten percent, meaning that they would have more flexibility to work more hours or treat more patients without exceeding their annual allowance and potentially facing tax charges.
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