Westminster urged to fix NHS Scotland’s ‘punitive pension bills’

Health Secretary Jeane Freeman has written to the Chancellor urging him to act over an NHS pension issue which she says is undermining the delivery of frontline services.

Picture: Andrew Cowan/Scottish Parliament via Getty Images

Some senior staff are opting to reduce hours or retire early as a result of UK Government pension rules which see them face extra tax liabilities for working longer.

The Scottish Government introduced a temporary policy from December whereby NHS staff have the option to get their employer pension contributions paid as part of basic pay to avoid what the British Medical Association (BMA) describes as “punitive pension bills”.

The measure is due to end on 31 March, and Ms Freeman has called on Sajid Javid to find a permanent solution.

In a letter she said: “I am writing to strongly urge you to take the decisive action necessary to ensure that pensions taxation rules no longer undermine delivery of frontline health services for the people of Scotland and other UK nations.

“The rules around annual allowances and lifetime allowances, together with the taper, continue to have a serious impact on NHS service delivery and staff, with clinicians across the NHS having to make unanticipated changes to their working commitments to avoid large and unexpected tax charges related to pension savings.

“These impact on the ability to deliver and maintain frontline services, and on the sense of value of our staff.

“The Scottish Government will continue to act to mitigate the harmful impact of pensions taxation rules on NHS Scotland staff and on frontline service delivery from April 2020 should this prove necessary.

“It is however clear that a permanent solution is urgently required, and can only be offered by your department.

“It is incumbent upon you to take the opportunity of the March Budget to fully and finally remedy the situation.”

Graeme Eunson, chairman of the BMA’s consultant’s committee, said: “The Cabinet secretary is absolutely right to point out that it is incumbent on the Chancellor to ‘fully and finally’ remedy the position in the UK Budget in March.

“It is an inescapable fact that doctors across Scotland are having to decline extra work due to massive and often unexpected tax bills.

“This letter shows that reality has really hit home with our politicians and underscores the absolute necessity for tax reform, with removal of annual allowance when it comes to defined benefit schemes such as the NHS pension scheme.”