Potential changes to GP pension plans

In a consultation released earlier this month, the Department of Health and Social Care (DHSC) announced a range of possible pensions options for doctors, which could mean that GPs gain the authority to set their own bespoke pension growth level at the start of each tax year and pay lower contributions correspondingly.

GPs and other senior clinicians would gain the ability to individually control how much their pension pot grows, allowing them to maximise the amount they can save without breaching limits on tax reliefs and facing significant pension tax bills.

Under the proposals, doctors would be able to reduce their pension contributions in 10 per cent blocks, for example, they could choose to contribute 10 per cent, 20 per cent or 50 per cent less. The Department has also suggested an option to top-up pensions towards the end of the tax year when the individual has a clearer idea of their tax situation.

This would mean that GPs would be able to ‘smooth’ spikes in pensionable income, by phasing in how much this increase counts towards their pensionable income.

The plans replace previous proposals to introduce a 50:50 option, in which doctors would have been able to halve their pension contributions and get half the rate of pension growth in return.

A Government statement said that the DHSC intends that this support will be available from the end of this calendar year, subject to the outcome of the consultation, in good time for the introduction of the new pension flexibilities.

A spokesman for the British Medical Association (BMA) said that while it is encouraging to see that a consultation is taking place, the body is disappointed that the Government did not consider removing the annual pension allowance altogether.

Rob Cadwallader, General Practice Partner at Milsted Langdon, said: “We know that the restrictions on pension allowances for high earners have resulted in some GPs facing additional tax bills. Our team of experts can help answer questions you have about the NHS pension scheme and offer a bespoke service tailored to your needs.

“We understand the importance of pension planning, and at Milsted Langdon, we can assist you every step of the way.”

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