For years, tax rules (that some consider punitive) have been imposed on doctors’ pensions. These have meant significant numbers of senior doctors being landed with large and unexpected tax bills, and had forced many to consider reducing their hours or even taking early retirement to avoid being financially penalised.
‘No one should be pushed out of the workforce for tax reasons … and .. I don’t want any doctor to retire early because of the way pension taxes work.’
So it came as an enormous relief for thousands of doctors when these words finally came from the chancellor Jeremy Hunt MP, this month during the recent 2023 budget.
Outlining his financial plans to the House of Commons, Mr Hunt confirmed that the tax-free annual allowance for pensions would increase from £40,000 to £60,000, while the lifetime allowance would be scrapped completely.
Hospital consultants can earn £90-120,000 per year from the NHS and up to £250,000 from their private practice. This means they often retire on platinum grade pensions (over £60k a year, double most peoples’ salaries).
So was it wrong to tax them on such earnings? Or is the government pandering to a wealth elite in an attempt to secure their support (and votes)?
Other resources
Here is Rishi Sunak’s explanation on doctors pensions on the BBC website.
