Hospitals must offer senior doctors salary top-ups before winter

Hospitals are urged to offer salary top-ups to senior doctors who have quit the NHS pension scheme in a bid to stop them cutting their hours and triggering a winter crisis

  • NHS Improvement has called for hospital chiefs in England to follow guidance  
  • Its hoped to prevent doctors from refusing extra work ahead of winter 
  • Pension reforms mean extra income will trigger hefty tax charges
  • Patients are already facing delayed or cancelled operations, expected to worsen

Hospitals are being urged to urgently offer senior doctors salary top-ups to avoid an NHS crisis this winter.

NHS Improvement, which oversees how NHS trusts are run, wants hospitals chiefs in England to adhere to guidance brought in amid the pensions fiasco. 

It says all hospitals should be giving cash to doctors who have quit the retirement scheme out of fear of high tax rates on their pensions.

The arrangement would mean doctors don’t lose out on employer’s contributions, which are worth 20.6 per cent of the pensionable salary.

But data obtained through Freedom of Information requests show the majority of hospitals are not offering the flexible pension policy. 

Hospitals are being urged by NHS Improvement to immediately offer senior doctors salary top-ups to ease pension reform tension before a winter crisis 

The Hospital Consultants and Specialists Association (HCSA) sent a request to all 153 acute trusts and foundation trusts.

Of the 108 which responded, just 10 trusts had a pension recycling policy, reports the Financial Times.

The HCSA has now said hospitals should be forced to offer cash payments, which are currently a voluntary policy.     

This would be in lieu of employer pension contributions that they are no longer receiving – currently worth 20.6 per cent of their salary. 

Claudia Paoloni, president of the HCSA, said: ‘We have long warned that Treasury inaction on the pension crisis will fuel a winter crisis.

‘And it seems that this is now dawning on the NHS at the highest level.’

Pauline Philip, NHS Improvement’s director of urgent and emergency care, said: ‘We are now signalling our expectation that trusts that have not done so already should make immediate use of the flexibilities available.

‘Our most significant shared challenge relates to workforce availability — particularly nursing, and also the continuing impact of pensions taxes on doctors.’  

Tens of thousands of staff have refused extra shifts out of fear the extra income will trigger hefty pension tax charges.

Patients across the country are already facing delayed, or even cancelled operations, because of crippling staff shortages in the NHS. 

And waiting times are expected to get worse – the British Medical Association (BMA) warned yesterday the NHS will face its worst winter ever.   

Ministers promised to reform the flawed pensions scheme in August. Under the existing system, introduced in 2016, anyone on more than £110,000 a year faces being hit by punitive tax bills.

GPs and surgeons earning six-figure salaries are among the hardest hit. Many have cut down on their hours to reduce the payments.

In fact, many senior doctors have stopped working extra shifts, including filling gaps on staff rotas.  

The NHS Confederation, a body which represents leaders across the entire health system, has repeatedly called for the tapered annual allowance to be scrapped.

However, it did not intend to issue any further instructions to employers on the guidance.

Niall Dickson, chief executive of the NHS Confederation, said: ‘As the NHS hurtles towards another monumentally busy winter period, we are facing a ticking timebomb where vital shifts might not be filled because of the ongoing pensions crisis.

‘We welcome the Department of Health and Social Care’s commitment to introduce changes to the NHS pensions scheme for senior doctors but we cannot afford to wait until April for these to be rolled out.’ 

Last month, the Royal College of Surgeons found 68 per cent of consultant surgeons they surveyed are considering early retirement because of the pensions tax rules.

The BMA yesterday warned that more than one million patients are expected to face four-hour waits in A&E over the colder months.

It said 300,000 patients could also end up stranded on trolleys in corridors as they wait for treatment. 

Experts say at least another 10,000 beds are needed to give hospitals in England and Wales a chance over the coming months.   


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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