Annual Allowance NHS Pension Tax and Disappearing Doctors

Q. As a Consultant doctor approaching age 54, I am worried about the impact on my NHS pension of the new taxes that is all the talk of my colleagues.

I am told that I will fall foul of the Annual Allowance next year if my pay increase happens, and I will also exceed the Lifetime Allowance meaning more tax!

I see many of my colleagues leaving the profession or going part time, and this causes chaos in planning as this was not expected at all just a short time ago.

Are these taxes to stay or are the government going to listen to sense?

A. This topic is indeed the talk of the decade with senior medics & dentists.

The Financial Times discussed this recently:

“The biggest union for doctors in the country has put pressure on the government to address the annual allowance, which is hitting consultants with ‘punitive’ tax charges.

The British Medical Association (BMA) is calling on the government to change both the annual allowance and the tapered annual allowance which it claims is forcing doctors to reduce working hours.

Gary Wannan, BMA consultant committee chair, told the Financial Times cuts to the annual allowance, which is now £40,000, are hitting doctors and their patients.

Like our GP colleagues, many hospital consultants are also facing punitive charges and tax levies on their pension funds.

This is forcing consultants to, at best, reduce their working hours. At worst, many are leaving the profession long before retirement age, frustrated the current pension legislation means they are effectively working for nothing.

This means patients are losing the opportunity to be seen by highly skilled clinicians and more junior doctors are losing out on the vital training and mentoring they need.”


Even though all versions of the NHS Pension Scheme remain very generous, it still means that many doctors are reducing their hours or leaving their posts entirely due to the additional taxes.

These are doctors that should have a few more years to contribute to their profession and help their junior colleagues’ progression.

It would be nice to think this will have an impact on ministers and lead to rapid change.

But, as ever, we don’t hold out much hope!

Graeme Urwin

My passion is to help senior doctors and dentists organise their finances to create their own strategy to achieve their goals in life. I do this impartially as I charge fees. Outside of work the words that best describe me are: family man, squash, badminton, jogging, travel, reading, archaeology, genealogy, writing a book on Robert the Bruce. I live in the hills of Northumberland in Rothbury and believe in living the life you love.

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