Pensions row ‘making bad situation worse in NHS’

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The continuing dispute over pensions that has seen doctors stop working overtime is “making a bad situation worse”, hospital bosses are warning.

Some have been refusing to work extra hours because they were being landed with bills after changes to how much could be accrued in pensions tax free.

A short-term fix, proposed in November by NHS bosses in England, will see the NHS pick up the tax bills.

But NHS Providers said that move had not begun to solve the problems.

Saffron Cordery, of NHS Providers, which represents NHS trusts, said the issue was still “making a bad situation worse” and adding to the “stress” on waiting times.

Last week, official figures showed performance against accident-and-emergency, cancer and routine operation waiting times had sunk to its worst level since records began.

Ms Cordery said: “It is still early days but it doesn’t look like the fix is having anything like the desired impact.

“The problem is that a decades-long way of working has unravelled very quickly.

“It has always been the case that doctors have offered to do extra work but now they are discovering a new work-life balance.

“They are also suspicious – even with the promises – that they will still lose out in the future.

“Trusts across the country are really worried about this and how, not just now but in the future, you persuade doctors to do the extra work.

“There are many factors that are causing the longer waiting times – rising demand, workforce shortages, flu – but this is certainly playing a role.”

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What is the pension dispute about?

The amount people can put into pensions tax free has been reduced for all workers.

In 2010-11 it was £255,000 but has now been cut to £40,000 a year – and drops still further for the highest earners.

The changes tend to affect those earning more than £110,000, about a third of senior doctors and GPs.

A number of short-term fixes have already been tried, including allowing staff to temporarily opt out of the scheme and add to their pay packet any pension payments they would have received.

But these have had a limited impact on the stand-off, prompting NHS England and ministers to agree to using NHS funds to cover the cost of tax bills by topping up their pension pots before retirement.

This means doctors can take money out of their pension pots to pay the tax bills, while providing the NHS with time to find the money.

The emergency measure is available for the 2019-20 tax year only.

The Treasury is still looking at how the pension changes have been implemented, in an attempt to find a long-term solution ahead of the start of the next financial year in April.

There are differences to how pensions work elsewhere in the UK, although tax-free allowances have been reduced in each nation.

Dr Vishal Sharma, of the British Medical Association, said “fundamental” reform was the only solution.

“The BMA has been warning of the impact of ludicrous pensions taxation rules on the NHS for almost two years.

“Doctors are scaling back their hours and will continue to do so if the pension crisis remains unaddressed.”

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