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Press comment: NHS 50:50 rule a sticking plaster which doesn't tackle root of the pension problem

22/07/2019

If you are covering the consultation opened today by the Department of Health and Social Care, which explore proposals to make the NHS Pension Scheme more flexible and transparent for senior clinicians, please see the following comment from Jon Greer, head of retirement policy at Quilter:

Jon Greer"The consultation into the 50:50 proposal opened by the Department of Health today is at best a sticking plaster. The plan, which is meant to give senior clinicians more flexibility in how they save for a pension and better equip them to avoid the pension tax charges, illustrates government is unwilling to properly diagnose the root cause of this issue. The annual allowance taper, a complex piece of pension tax legislation, is resulting in clinicians facing punitive tax bills for working additional hours. It means that NHS services are being left short-staffed. The policy should be completely unwound, rather than implementing this workaround put forward by the health service.

"The government’s own Ministers have rightly highlighted that there cannot be special tax arrangement for schemes in particular public sector vocations. The chief secretary to the Treasury, Liz Truss, has already acknowledged in parliament that creating different rules in the tax system for certain sectors is not a practical option as it risks discrepancies and tax arbitrage.

"Since it also refuses to abolish the annual allowance taper, the only option for the government is to retro-fit this backdoor solution into the design of the NHS scheme in order to try and alleviate some pressure on doctors. A far simpler option would be to scrap the taper altogether, which is the root cause of the problem. This would also help to make sure that other public sector workers faced with the same problem are not also affected by the taper."

For more information contact

Alex Berry023 8072 626007741 151931alex.berry@quilter.com
Michael Glenister020 7778 963807469 144535michael.glenister@quilterinvestors.com

Notes to Editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £118.4 billion in investments (as at 30 June 2019).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions; and discretionary fund management.

The business is comprised of two segments: Advice and Wealth Management and Wealth Platforms.

Advice and Wealth Management encompasses the financial advice business, Quilter Financial Planning; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

Wealth Platforms includes Old Mutual Wealth UK platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

The Quilter plc businesses are being re-branded as follows: 

  • Quilter Financial Planning (previously Intrinsic)
  • Quilter Private Client Advisers (previously Old Mutual Wealth Private Client Advisers)
  • Charles Derby Group (becoming Quilter Financial Advisers)
  • Quilter Financial Adviser School
  • Quilter Cheviot
  • Quilter Investors
  • Old Mutual Wealth (becoming Quilter Wealth Solutions in 2020)
  • Old Mutual International (becoming Quilter International in 2020)

This press release is for journalists only and should not be relied upon by financial advisers or customers.

Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.