The British Medical Association (BMA) has all but conceded that GPs will have to continue paying up to 14.5 per cent pensions contributions after the Pensions Act is enshrined in law in 2015, despite last year feeling confident of negotiating a flatter tiering of contributions.
The BMA has now said that it seems unlikely that it will be successful in pushing through these demands, which would have lead to GPs paying a similar percentage of their salaries as lower paid NHS workers.
However, the battle for fairer contributions will continue after the Act is implemented, the BMA has said, because the Government would be ‘unable to refuse the argument of fairness’ once the higher contributions are in place.
Last year the BMS hailed a “milestone concession” on pensions contained in a letter from Health Secretary Jeremy Hunt. In the letter, Mr Hunt suggested that the Government was willing to consider a flatter structure from 2015, as long as it raises an average 9.8 per cent.
However, it has now accepted that, from April this year, top earners in the healthcare sector will pay up to 13.3 per cent in contributions compared with 5 per cent for the lowest earners.
The other issue the BMA has with pensions is the rising retirement age. It has pointed out that, under current proposals, if a 40-year-old GP would have to work for seven years longer, to the age of 67, they could be paying 50 per cent more into the scheme to get around 13 per cent less out of it, which it says is completely unfair.
As an accountant; David Jacobs offers a range of accounting, audit and taxation advice to the legal and medical professions.