“Warnings about the sustainability of the NHS are coming from all sides about a range of issues, but these are not solely linked to funding. There are also concerns about the ability of the health service to recruit and retain staff, and a leading think tank has said the situation has got so bad that it’s a ‘make or break’ issue. The suite of problems, which has put the NHS under severe pressure, includes pension policy and figures show that the proportion of GPs who have taken voluntary early retirement has doubled from 33% to 62% since 2011/12.
“Pension taxation is never popular, but this is not about politicians winning over older voters, it is about the risk of damaging a critical UK institution – the one that ensures the health and wellbeing of the nation. If that is not enough to promote change, then nothing will be.
“There were previously noises that the solution will need to be a carve out from pension taxation rules, thankfully, this report makes no such suggestions. The think tank’s trio of recommendations include a 50:50 option where members pay half the contribution rate in return for half the benefit, the choice to opt in to the life assurance element of the scheme and a pensionable pay cap. These are sensible ideas that need careful consideration and evaluation, although simplification of the tax system could help address many of these issues without the NHS having to adapt its own policies.
“The NHS makes up a massive proportion of the workforce, as ONS figures early this week revealed a record 1.67 million people were working for the NHS in December - 32,000 more than a year earlier. Dismissing pension issues for this group, could be enough to dictate voters party allegiances. So policymakers and HM Treasury are avoiding the issue at their peril.”