The number of hospital doctors that could be helped by Jeremy Hunt’s pensions giveaway has been cast into doubt, after new figures revealed that only 100 of them left the NHS last year due to voluntary early retirement.
Criticism has mounted about the measure announced in the budget, which would scrap the up to 55% tax levied on lifetime pension pots worth just over £1m and raise the annual allowance threshold from £40,000 to £60,000.
Despite claims it would only benefit the super-wealthy, the Treasury suggested the move would help the NHS to retain staff.
On Wednesday, Hunt said he had “listened to the concerns of many senior NHS clinicians, who say unpredictable pension tax charges are making them leave the NHS just when they are needed most”.
He added: “I do not want any doctor to retire early because of the way pension taxes work.”
But instead of offering the tax break just to doctors, as Labour has called for, Hunt said “the issue goes wider than doctors” and that “no one should be pushed out of the workforce for tax reasons”.
The number of hospital doctors to leave the NHS recently who it may have prevented from doing so is barely into three figures, according to statistics.
Just 105 of them left the NHS for voluntary early retirement in 2021/22, according to information provided by junior health minister Will Quince. The figure was 561 among nurses and 20 for health visitors.
Aside from the 8,191 NHS staff whose reason for leaving was “unknown”, the top recorded reasons given by NHS leavers were reaching the end of a fixed-term contract, hitting retirement age or relocating.
Tax expert Prof Richard Murphy of the University of Sheffield said it appeared ministers did not have the data to back their claims.
He said: “If they don’t know how many doctors are retiring for this reason, why did they change the pension policy for everybody to keep 105 doctors in the NHS?
“It looks like they used the fact that they know doctors are leaving for this reason to provide a pensions bung to the wealthy.”
Murphy added: “They haven’t got an evidence base for this policy, and that’s good enough to say it can’t have been for retiring NHS doctors.”
Daisy Cooper, the Liberal Democrat health spokesperson, said many staff had been driven away by burnout or better wages elsewhere. “Sadly, this move on its own does nothing for nurses, health care professionals and other dedicated NHS staff on low pay, who have been working to exhaustion in crumbling hospitals,” she added.
The pensions giveaway was also branded “the most expensive sledgehammer you could have imagined” to “crack a nut” by Lisa Nandy, Labour’s shadow levelling up secretary.
“We accept that there is a problem with doctors,” she told the BBC’s Sunday with Laura Kuenssberg show.
“But there are fairer and better ways to deal with that problem than simply handing over a billion pounds of taxpayers’ money to fund a tax cut for the wealthiest 1%, 84% of whom aren’t doctors.”
A senior cabinet minister admitted on Sunday he did not know how many public sector workers would benefit from the abolition of the pension lifetime allowance.
Oliver Dowden, chancellor of the Duchy of Lancaster, said “it tends to be a lot of public sector workers who are hit by this cap”.
The Office for Budget Responsibility has predicted 15,000 people will remain in the workforce as a result of the much wider pension changes – but not how many are expected to be doctors.
Hunt was well aware of the issue of pension contributions for NHS doctors when he was a backbencher. Last June, the cross-party health select committee he chaired called it a “national scandal that senior medical staff are being forced to reduce their working contribution to the NHS or to leave it entirely because of NHS pension arrangements”.
A spokesperson for the Department for Health and Social Care suggested 22,000 senior NHS clinicians could exceed the previous £40,000 annual allowance in 2023/24, and that about 31,000 clinicians had reached at least 75% of the £1.073m lifetime allowance.
The spokesperson added: “The increase of the annual allowance to £60,000 and the abolition of the lifetime allowance will offer annual tax-free pension savings and unlimited pension savings over a full career.
“These measures will also ensure that NHS doctors are not discouraged from remaining in their roles and taking on extra hours – allowing them to treat as many patients as possible and tackle the backlogs.”
