The British Medical Association (BMA) has said it is “encouraged” by the Chancellors’ comments on NHS pensions but reiterated that “urgent action” must be taken to solve the issue.

Responding to comments made by Chancellor Philip Hammond to the Treasury Committee last Friday, 26 April, the trade union for doctors said that it understood that changing current tax and pensions legislation “may take time” but outlined some “immediate mitigations” to help solve the crisis.

The BMA has called for a “UK-wide policy” allowing the recycling of all employers' pension contributions and the creation of a UK-wide scheme for NHS staff to retain or purchase death benefits.

Hammond told the committee that he was in talks with the Health Secretary Matt Hancock about making public sector pension arrangements “more flexible” in the overall renumeration package, as seen in the private sector.

Speaking to Pensions Age, BMA chair of the consultants committee Dr Rob Harwood, said: “We are encouraged that the Chancellor is now aware of the harsh impact that current tax and pensions rules are having on doctors in the health service, but hope that he will now translate words into urgent action to resolve this issue.

“We are not calling for special treatment for doctors, only that they are treated fairly. As the Health Secretary is aware, the unintended consequences of changes to the pension taxation rules, coupled with changes to the NHS pension scheme results in unfair and punitive charges being levied on doctors.”

The problem stems from the introduction of the tapered annual allowance in April 2016, and the lowering of the tax relief threshold from £1.25m to £1m, which has meant that some GPs are penalised for continuing to pay into their pension fund.

As a result of the measure, some doctors can face 100 per cent tax charges on their earnings with no subsequent benefit in their pension.

In addition, the BMA said it would like the government to review the pay scales of the 2003 consultant contracts in England and Wales and the 2004 contracts in Scotland and Northern Ireland, to smooth the pay rises that trigger “disproportionately large tax bills”.

The BMA added that it wishes to meet with the Treasury to address the problems.

Last week, the trade union criticised the government for not listening to, or advancing, proposals it has suggested to address the “perfect pensions storm”, commenting on a series of letters it had sent to the government.

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