Quilter has hit out at the possibility of changing the pension rules for doctors, saying the Treasury will not support separate provisions for different professions.
In response to discussions between health secretary Matt Hancock and the Treasury last week around a potential exemption to standard lifetime allowance rules, Quilter pensions expert Ian Browne says arguments for changing the pension tax rules are likely to fall flat.
Medical magazine Pulse reported on Friday that Hancock had broached the topic of altering rules for general practitioners with the argument that restrictions are negatively impacting recruitment for the wider sector.
The £250,000 cut to pensions tax relief compared with three years ago means there is limited benefits to be had for GPs paying into their pension funds, Hancock reportedly argued.
Leaving the profession earlier than the expected retirement age has led to a sizeable increase in opt outs.
Calling for change will “fall on deaf ears”, however, according to Browne, who says acting on the specific needs of one profession will set a “dangerous precedent.”
He says: “If the treasury decided they would change lifetime allowance rules for all going forward then you are still left with a group of people who have suffered with the consequence of these rules for a period of time and will likely want recompense. Funding that would hit government coffers hard.
“Triage is an essential part of how a hospital works and with Brexit right around the corner government will be using a similar strategy to decide what policy changes have to be done right away. So even if they did want to make sweeping changes to the lifetime allowance they will be unable to get anything thorough parliament meaning no changes to primary legislation will be on the cards any time soon.”
Seeking financial advice to map out alternative ways of funding pensions in the space is a better solution, Browne adds.
The discussions between Hancock and the Treasury follow its announcement of a £4.5bn sum earmarked for primary and community care as part of the NHS’s long-term plan last week.
Under this, the new GP contract will mandate that practices join networks.
Hancock says: “‘Of course tax is a matter for Treasury, but I’ve had conversations with the Chancellor about looking at the details of tax treatment of pensions because I understand the impact that that has.
“Hard-working GPs – and doctors of all kinds – have been unfairly hit in recent years by complex regulations and tax changes impacting their pensions.”