Latest news with #NHSPensionScheme
Telegraph
06-05-2025
- Business
- Telegraph
Retired NHS workers on six-figure pensions reaches record high
The number of retired NHS workers picking up six-figure pensions has reached a record high after increasing tenfold in the last decade. More than 3,000 former health service employees are being paid an annual pension of more than £100,000, up by 64pc compared with a year ago. Campaigners are now calling on Wes Streeting, the Health Secretary, to overhaul the 'unfunded and gold-plated' NHS pension scheme. The latest figures from the NHS Business Services Authority (NHSBSA) show the cost of its pensions is now at £12bn per year, with 1.1m former staff qualifying for the retirement payments. It means there are 47,267 former NHS staff being paid pensions worth more than £50,000 per year, up by 15pc from last year. Of those, 3,126 are picking up more than £100,000 this year. Last year, the figure stood at 1,909. A decade ago, the number of former NHS staff with a pension of £50,000 per year or more was just 19,886 and the number getting £100,000 or more was limited to just 285 people. In the private sector a person would need on average a pension pot of around £3m in order to be able to settle down with an inflation linked six-figure pension income. Government officials said part of the reason for the rapid rise in the numbers of people with the biggest pensions may be linked to higher inflation. This is because the pensions are index-linked, meaning the higher the inflation, the more the amount of pension increases the following year. Higher earning employees within the NHS – typically GPs and consultants – have to contribute 12.5pc of their earnings to be included in the pension scheme. But for NHS pensions there is no pool of contributions building up over time. The payments are made up from the salary deductions from people currently working in the NHS as well as additional payments to top the scheme up from central government. Critics of the NHS retirement scheme say its generosity creates a financial time bomb with 2.5m members expecting a pension from it in the future. John O'Connell, the chief executive of the TaxPayers' Alliance, a campaign group, said: 'There is now an extraordinary elite of NHS retirees who rake in massive pension payments every year, not paid out of retirement pots but instead out of the pockets of working taxpayers. 'That's because NHS employees, like in much of the public sector, get access to gold-plated and unfunded defined benefit schemes which are now almost absent in the private sector. 'As part of his plan to radically reform the NHS Wes Streeting should move all new staff onto fully-funded, defined contribution schemes.' A Department of Health and Social Care spokesman said: 'The NHS Pension Scheme provides generous retirement benefits for hard-working staff after a lifetime of service, and the scheme was comprehensively reformed in 2015 to ensure the costs are sustainable. 'Staff and employers are required to pay contributions that meet the full cost of the benefits being built up, with higher earners paying proportionately more than other members.'
Yahoo
14-04-2025
- Business
- Yahoo
GP boss guilty of misconduct over pension funds
The former practice manager of a GP surgery has been banned from acting as a company director after failing to pay more than £75,000 into her employees' pension funds - despite deducting contributions from their wages. Sonia Simkins, 54, from Dudley in the Black Country, ran Hawes Lane Surgery in Rowley Regis for nine years until it closed suddenly last July after a bankruptcy order was made against Ms Simkins. An investigation by the Insolvency Service (IS) found she had been taking pension contributions from her staff's wages but had not paid them into the NHS Pension Scheme. The Black Country Integrated Care Board (ICB) said all patients had been moved to other practices. At the time of its closure, Hawes Lane Surgery had more than 4,000 registered patients and 10 employees. The IS said that between August 2019 and December 2020 and June 2023 and June 2024, Ms Simkins should have paid £76,868 into the NHS pension fund for her staff, more than £25,000 of which was deducted from salaries as staff contributions. The remainder should have been paid as employer contributions. However, only £1,722 in total was paid. The IS said investigations by the official receiver had been unable to determine what had happened to the money. On 3 April, Ms Simkins accepted a bankruptcy restrictions undertaking (BRU), which allows a bankrupt person suspected of misconduct to accept restrictions without needing to go to court. She will be barred from managing a limited company for a period of seven years, as well as from taking out a loan of more than £500 without disclosing the restriction. She will also not be allowed to work in some senior roles in the NHS. Senior official receiver at the IS, David Chapman, said: "Sonia Simkins deducted pension contributions from her staff's wages but failed to pay more than £75,000 into the NHS pension fund, while the closure of Hawes Lane Surgery had an immediate impact on staff and patients in Rowley Regis. "Following an Insolvency Service investigation by the Official Receiver, Simkins accepted her misconduct." In a statement, the Black Country ICB said: "The ICB were made aware of the closure [of the surgery] on Wednesday 24 July. "Clinical services were temporarily moved to Portway Family Practice to ensure patients had ongoing access to local GP services, and arrangements were made to relocate all patients to a different GP practice in their local area. "Hawes Lane Surgery is now closed and the contract for the practice has ended." Follow BBC Birmingham on BBC Sounds, Facebook, X and Instagram. GP surgery shuts permanently with one day's notice Insolvency Service Black Country ICB
Yahoo
01-04-2025
- Health
- Yahoo
One in four doctors refuse overtime to avoid five-figure tax bills
Labour's pledge to slash NHS waiting lists is being sabotaged by a litany of administrative errors, pension delays and punitive tax rules, Telegraph analysis shows. With millions waiting months for treatment, doctors are turning down shifts out of fear they could be stung with exorbitant tax bills due to a cap on pension contributions which would leave them effectively paying to go to work. And despite being given three years to prepare, an overhaul of the NHS Pension Scheme remains months behind schedule and does not know when it will catch up. As NHS waiting lists stand at almost 7.5 million, eight months after Labour took power, Telegraph Money can reveal: A quarter of doctors have reduced their overtime because of potential five-figure tax bills, leading to a 10pc reduction in NHS capacity. 62,000 crucial pension statements are now six months overdue, despite extra NHS spending on overtime and additional staff. A statutory deadline given three years in advance will be missed, leaving NHS workers and retirees in the dark over how much their pension will be. Thousands of doctors and dentists are in line for first-time tax bills. Labour swept to power last July with a huge majority after promising a raft of reforms in an election manifesto entitled 'Change'. The 136-page document included a firm pledge to save the NHS and cut waiting lists by providing an extra 40,000 appointments a week in England alone. However, waiting lists have fallen by just 3pc since Labour took power and currently stand at 7.4 million. More than three million people have waited over 18 weeks for treatment. Experts are now warning that the refusal to tackle draconian legislation and a pension scheme racked with delays is obstructing progress – with serious knock-on effects for patient care. Doctors have long warned that convoluted pension rules were forcing them to turn down work or even retire early. The Conservatives responded by removing the Lifetime Allowance – a cap on pension contributions before tax charges became due. However, like all workers, NHS staff can still only contribute £60,000 or their salary – whichever is higher – into a pension each year and receive tax relief. Worse still, the limit can be reduced to just £10,000 for high earners – and any breach incurs a tax charge. According to the British Medical Association, the rule has led to doctors reducing their workloads and turning down overtime because it creates a cliff edge where just £1 in extra earnings can generate a £22,500 tax bill. Its latest research, released this week, found that the NHS had lost the equivalent of 5,400 full-time consultants, representing almost 10pc of the available workforce, and around four million GP appointments as a result. Dr Vishal Sharma, the organisation's pensions committee chairman, said: 'It is an absurd situation when the Government is promising to bring down near-record waiting lists, yet doctors are being forced by complex and unfair pension tax rules to turn down or reduce extra work. 'Doctors want to do more to help patients and do as much as they are able to, but no one should be expected to pay to work, which is the bizarre scenario that this cliff edge can create. 'This is a real, not hypothetical, issue affecting the capacity in hospitals and GP practices right now.' The British Medical Association is calling on the Government to remove the annual allowance reduction. A Department of Health and Social Care spokesman said: 'Current tax arrangements mean doctors can take on extra hours and stay within tax-free pension saving limits. The tapered annual allowance, meanwhile, applies only to those whose taxable earnings exceed £200,000 per year. 'We have already made progress on our Plan for Change – delivering an extra two million appointments and cutting waiting lists by 193,000.' Doctors who work privately or pick up overtime rely on remediable pension savings statements to track their income and pension contributions, helping them avoid excessive tax bills. The NHS Business Services Authority – which runs the NHS Pension Scheme – was required to send statements to 137,000 staff by Oct 6 last year. At the end of January 2025, it said 57,000 had been sent, 56,000 were still outstanding and another 25,000 had been calculated but not yet posted. It also said extra resources had been taken on to deal with the backlog, including offering overtime and recruiting more staff, and that most of those outstanding would be issued by the end of February. By mid-March, however, Karin Smyth, health minister, admitted that just 61,000 had been sent and the number calculated but not posted was actually 2,000. The true backlog stood at 75,000. The mix-up in the figures was attributed to some statements being categorised as issued when they were in fact still undergoing quality checks. Dr Sharma said: 'Doctors' pensions are incredibly complex and without clear records. It is almost impossible to make any decisions about finances and work commitments. 'There's no doubt that without up-to-date information, doctors will be pre-emptively reducing or turning down extra work to avoid additional pension tax bills that they might not even be due.' Dr Luke Evans, shadow health minister, said it was time for The Pensions Regulator to intervene. He said: 'The delays and confusion mean that some doctors are actively choosing not to carry out further vital work in the NHS. This will have a direct impact on patients and waiting lists, simply because of admin errors with pension calculations. 'For the sake of patients and doctors alike, the NHS Business Services Authority and ministers need to get their figures right and work urgently to issue the remaining statements, and the regulator needs to take swift action to work out what has gone wrong. 'The previous government made progress on the annual allowance to remove perverse disincentives stopping our most senior and experienced doctors from working. I would urge Labour ministers to get a grip of the reality of NHS pensions, their administration and their impact on doctors providing care.' An NHS Business Services Authority spokesman said: 'A total of 75,000 Remediable Pension Savings Statements have been dispatched as of March 25. The NHS Pensions Service has assigned additional resources to issue [statements] as a matter of urgency. 'We're prioritising the [statements] that are more complex and require manual calculations. These will be dispatched in batches in the coming weeks.' In 2015, the government introduced reforms to curb pension costs. Public sector workers, including NHS staff, were moved from gold-plated final salary pensions to less generous schemes based on their average earnings. In 2018 however, the Court of Appeal ruled that the changes were implemented in a way that amounted to age discrimination in what is known as the McCloud judgment. The result is that eligible workers can now choose between the two available pension schemes for service between 2015 and 2022. When the necessary legislation was passed in March 2022, the NHS Pension Scheme was told to contact those affected and outline their choices by March 31 this year. However, the NHS Business Services Authority has now confirmed it will miss the deadline. Anyone in or close to retirement won't know how much pension they'll receive until their statement arrives. Dr Evans said that just 21 statements had been issued by mid-March, which he described as 'astonishing'. He said: 'It's simply not good enough that there are over 381,000 doctors still waiting for statements ahead of the statutory deadline of March 31. This matters, as it means they can't make an informed choice on how to plan their futures. Ministers and the NHS Business Services Authority must look at this urgently. 'This is clearly just the tip of the iceberg. With the NHS Business Services Authority being referred to the Pensions Regulator, deadlines constantly missed, and Ministers getting their numbers wrong, there is a wider issue with NHS pensions that the Government needs to get hold of.' An NHS Business Services spokesman said deadlines were being discussed with the Department for Health and Social Care. He added: 'We will update NHS Pension Scheme members directly to confirm delivery timelines as soon as possible.' According to figures from financial specialists Wesleyan, provided exclusively to The Telegraph, 4,120 doctors and dentists are also in line for a new pensions tax bill. As a result of the McCloud judgment, NHS workers' 2015-2022 service will be temporarily 'rolled back' into the old pension scheme until they make their choice at retirement. This means that some will now receive higher pensions than they expected – leading to a tax bill if this makes them exceed their allowance. Madeleine Dowling, of Wesleyan, said: 'We're seeing clients not able to get the paperwork they need, or when they do, critical information is missing or incorrect. We even know of some people who are having to retire without an accurate understanding of how much they have in their pension – a worrying position for anyone to be in. 'When it comes to McCloud, there isn't one path that will be right for everyone. Some people will be better off in one scheme, and some in another, even if that means having a tax charge to pay. The challenge is that working out what the 'right' option is can be very complicated.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Telegraph
01-04-2025
- Health
- Telegraph
One in four doctors refuse overtime to avoid five-figure tax bills
Labour's pledge to slash NHS waiting lists is being sabotaged by a litany of administrative errors, pension delays and punitive tax rules, Telegraph analysis shows. With millions waiting months for treatment, doctors are turning down shifts out of fear they could be stung with exorbitant tax bills due to a cap on pension contributions which would leave them effectively paying to go to work. And despite being given three years to prepare, an overhaul of the NHS Pension Scheme remains months behind schedule and does not know when it will catch up. As NHS waiting lists stand at almost 7.5 million, eight months after Labour took power, Telegraph Money can reveal: A quarter of doctors have reduced their overtime because of potential five-figure tax bills, leading to a 10pc reduction in NHS capacity. 62,000 crucial pension statements are now six months overdue, despite extra NHS spending on overtime and additional staff. A statutory deadline given three years in advance will be missed, leaving NHS workers and retirees in the dark over how much their pension will be. Thousands of doctors and dentists are in line for first-time tax bills. Labour swept to power last July with a huge majority after promising a raft of reforms in an election manifesto entitled 'Change'. The 136-page document included a firm pledge to save the NHS and cut waiting lists by providing an extra 40,000 appointments a week in England alone. However, waiting lists have fallen by just 3pc since Labour took power and currently stand at 7.4 million. More than three million people have waited over 18 weeks for treatment. Experts are now warning that the refusal to tackle draconian legislation and a pension scheme racked with delays is obstructing progress – with serious knock-on effects for patient care.
Yahoo
24-02-2025
- Health
- Yahoo
Gold-plated NHS pensions cost taxpayers £1bn a month
The NHS is paying out nearly £1bn a month in staff pensions – around four times the amount it spends on the average person's healthcare, figures show. Retired members of the NHS Pension Scheme were paid £11,400 on average last year, with the total bill reaching £11.2bn. A further £757m was sent to 111,000 widows and dependants, according to the scheme's annual report. By comparison, last year's NHS budgets for England and Wales were £181.7bn combined, or the equivalent of around £3,000 per resident. NHS retirees are provided with guaranteed incomes for life that rise annually with inflation, many of which are based on the recipient's final salary. Almost 2,000 NHS staff already receive pensions of over £100,000 – a figure that has more than doubled in a year. And the Government has already handed over an extra £2.8bn per year since 2019 to help employers with the spiralling cost of gold-plated schemes. Taxpayers also paid £13.7bn in pension contributions for NHS workers, but Telegraph analysis of the report suggests this will hit £16bn for 2024 to 2025. John O'Connell, of TaxPayers' Alliance, said: 'It will shock patients and taxpayers beyond belief the extent to which the NHS budget is devoted to feathering the nests of its often pampered employees. 'The productivity data on the health service is appalling, demonstrating that far too many in the system see employment as an easy pay day rather than as the vital public service that it should be. 'Public sector pensions in the NHS and beyond need a complete overhaul with new staff moved onto a defined contribution scheme, ensuring fairness for both staff and taxpayers.' NHS workers pay between 5.2pc and 12.5pc of their salary towards a pension, with employer contributions rising to 23.7pc in April last year. The previous rise in employer contributions – implemented in 2019 – has cost the Government £14bn over five years. Under current rules, high-earning workers can pay up to £60,000 a year into their pension before triggering a tax charge. Many NHS doctors who also work privately are in danger of exceeding this amount. Experts warned that this had led to them turning down work or retiring early to avoid unexpected tax charges. However, Helga Pile, of Unison, said that many NHS pensions were below average. She said: 'The figures are nothing like the true picture for many NHS workers, as they're skewed by higher-paid doctors and consultants. 'For much of the workforce, the reality is a pension lower than the NHS average. Many on the bottom pay grades are leaving the scheme entirely because they can't afford it. 'But if we want people to work in the NHS and deliver public services, it's only right for them to expect a decent income when they retire. Particularly when health workers have seen their pay eroded for a decade and more.' A Department for Health and Social Care spokesman said: 'This comparison is misleading as it compares two fundamentally different things – earned pension entitlements from decades of public service versus annual healthcare spending for the entire population. 'NHS pensions are part of the total reward package that has helped build and maintain our healthcare workforce over many years.' During her time in office, Chancellor Rachel Reeves has already signed off on pay rises of up 22pc for junior doctors to ward off further strikes. She has also given a proposed 2.8pc pay increase the green light for 2024 to 2025, but the British Medical Association criticised the figure and warned of more walkouts if pay erosion was not addressed. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
