The government could face a legal challenge if it fails to extend pension flexibility offered to high earning NHS doctors to millions of other public sector workers.

The warning came from public sector unions — including those representing firefighters and dentists — following the government’s announcement on Wednesday that it would allow senior hospital doctors the freedom to choose their pension contributions levels

The changes to the flexibility of doctors’ pensions were designed to address concerns that the rigid structure of the NHS pension scheme, which sets the level of contributions, is exposing senior doctors to five and six-figure tax bills for breaching their “tapered” annual pension saving allowances.

The Treasury also said on Wednesday that it would review how the tapered annual allowance — which limits the amount higher earners can save in their pension pots — affects the delivery of other public services beyond the NHS, but it only pledged to make changes to pension arrangements for doctors, and not for other public sector workers also affected by big pension tax bills.

The taper is forecast to earn the Treasury some £1.2bn in the current financial year, but it is also fuelling a workforce crisis in the NHS because senior doctors have few options to reduce the risk of their tax bills exceeding their allowance other than reducing their hours. The government’s proposals will give them flexibility to decrease their pension contributions, reducing their risk of triggering tax charges.

However, the Treasury did not offer other public sector workers the same freedom to reduce their pension contributions, even though hundreds of thousands of high earners across the public and private sectors are also affected by the so-called “tapered” annual allowance.

READ  BoE's Saunders does not expect UK rates to rise 'far or fast'

Unions representing dentists and firefighters warned the government it could face a legal challenge if it didn’t reconsider widening its consultation on changes to the NHS scheme.

On Wednesday, the British Dental Association wrote to Matt Hancock, secretary of state for health, saying its members were facing the same five-figure pension tax charges as their medical colleagues.

“With access problems to NHS dentistry mounting, government should not be giving colleagues any reason to do less,” said Mick Armstrong, chair of the BDA.

“It’s great ministers have recognised the need for flexibility, but no healthcare professionals should be left behind. Failure to take a consistent approach risks opening the floodgates to legal challenges.”

The BDA said it had been lobbying the government to make changes to the NHS pension scheme since 2017, a year after changes were introduced to clamp down on pensions tax relief for those earning more than £110,000 a year.

On Wednesday, the Fire Brigades Union said it would also be lobbying the government to extend the changes to its members.

“We’ve raised this issue with fire service employers and government departments repeatedly in the past and we’ve looked at ways to avoid breaching it and incurring the change,” said Sean Starbuck, national officer, with the FBU.

“It is important that, if it is available, firefighters get the same opportunities as other workers. “The FBU will monitor any developments very closely and consider whether there is potential for a challenge on behalf of firefighters.”

READ  British Library cafe should treat staff like adults and not take away their mobiles | Letter

The Treasury said: “Public sector workers play a crucial role in delivering Britain’s world-class public services. We look at remuneration in the round, taking action when required, as we have done with the NHS, which is facing a significant and unique delivery challenge.

“The review of the Annual Allowance taper will include consideration of how it operates to support the delivery of all public services”



READ SOURCE

WHAT YOUR THOUGHTS

Please enter your comment!
Please enter your name here