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Doctors deserve, at the very least, an extension on the deadline for NHS scheme pays


Jon Greer

Head of retirement policy at Quilter

As a nation we have always been proud of the National Health Service, but arguably we have never been more proud or in need of that service and the people that provide it until the recent pandemic.

We were and continue to do doing small things to show our appreciation. Clapping on a Thursday night, drawing rainbows and putting them in the window, or simply by staying home.

At Quilter we want to ensure we too are using our expertise to show our appreciation. Part of that is ensuring that NHS staff are getting the most out of their finances.  Which is why we wrote to wrote to the Chancellor of the Exchequer, Rishi Sunak, as well as the Health Minister, Matt Hancock, urging them to consider an extension to the July ‘scheme pays’ deadline for NHS workers that surpass the pensions annual allowance. We are pleased to see the Department of Health and Social Care have confirmed there will be an extension till the end of October.

The NHS pension scheme has been a subject of intense debate in recent months due to the acute impact of the ‘tapered annual allowance’ which has led to some NHS staff cutting their hours and declining additional shifts.

While the Budget lifted the ‘adjusted income’ and ‘threshold income’ levels under the Tapered Annual Allowance by £90,000 for the 2020/21 tax year, there is still a legacy of annual allowance issues for many doctors.

In fact we have seen a number of doctors who are only now realising that they have annual allowance liabilities for historic tax years. As the NHS Scheme Pays deadline has passed for those tax years, doctors have fewer options to settle the annual allowance charge and some have to resort to take on significant debts.

The deadline for the 2018/19 NHS Scheme Pays election was the 31 July, but it is unrealistic to expect NHS staff to be conscious of this. As they deal with this unprecedented crisis, many NHS staff are working extra hours and are understandably time poor. And even if they did have time it’s absurd to expect that NHS staff will be in mindset to focus on their finances. This is something our specialist financial planning team supporting the medical sectors has found first hand.

While the extension is not as generous as we hoped, extending the deadline for Scheme Pays will at least ensure all doctors are given adequate time to plan and are not adversely impact by pension tax rules while they are focused on fighting Covid-19. And with a review of the extension set for the end of month we may see further extensions.

As doctors dedicate their time to the rest of us they are struggling to juggle their time and find room for planning their finances. Doctors are risking their lives and the least we can do is ensure they are not being financially penalised for it.