- Ahead of the upcoming Autumn Budget, Chancellor Rachel Reeves’ reversal to scrap an increase to pension tax will not stop GPs from withdrawing their pensions and seeking early retirement, says leading accountancy chief Katie Collin.
- Recent reports have suggested Rachel Reeves is planning to scrap her much-touted hike to pension tax. Collin argues this U-turn is only a mere sticking plaster – and that, without an urgent review into the pension processing system, frustrations among UK GPs could overboil.
- With GPs already having voted to take collective action and financial and administrative pressures at a high, tensions among practices are at critical mass. Collin is urging the Government to ease the blockers to their pensions, or risk sparking a mass talent exodus.
Ahead of the upcoming Autumn Budget, Chancellor Rachel Reeves’ reversal to scrap an increase to pension tax will not stop many GPs from withdrawing their pensions and seeking early retirement, says leading accountancy chief Katie Collin.
Collin is a partner at Ramsay Brown LLP, a chartered accountancy firm specialising in providing tax and accountancy services for the UK’s medical community. Collin herself is particularly focussed on delivering accounting and governance support for professionals across the UK’s Primary Care Networks, lending strategic advice on matters such as superannuation, financial analysis and restructuring.
With the Chancellor set to present the Government’s Autumn Budget on 30th October, recent reports have suggested that Rachel Reeves is planning to scrap her much-touted hike to pension tax (The Times). Reeves supposedly backtracked on this decision to avoid unfairly and disproportionately affecting public sector workers, including those across the NHS.
While Collin supports Reeves in this decision, she argues it will just be a sticking plaster – and warns that, without an urgent review into the NHS’ pension processing system, frustrations among UK GPs, in particular, could overboil. Reports that the Chancellor is mulling over caps to tax-free pension withdrawals (City AM), could send these frustrations spiralling further – and possibly encourage staff across the NHS to look for exits.
GPs have already voted to take collective action against their ever-increasing workload and ever-decreasing resources (BMA). Under these intense financial and administrative pressures, tensions among UK GPs are already at critical mass. For Collin, the Government must now look to shore up the atmosphere among GPs and ease the blockers to their pensions or risk causing a mass talent exodus – something they’ll want to avoid as we approach another difficult winter period for the NHS.
Katie Collin, partner at Ramsay Brown LLP, said: “The fact of the matter is that GPs already feel messed around – and that’s without even mentioning the pension tax debacle. Reeves’ U-turn on hiking pension tax, while right, won’t stop GPs across the UK from retiring early and withdrawing their pensions. Tensions are brimming.
“There are far too many other issues overshadowed by the pension tax debate. The McCloud remedy, for example, though designed to remove age discrimination in public pension schemes and improve the system, has actually made it harder for pension holders and accountants to access compensation. To add fuel to the fire, GPs across the NHS are also being asked to run Primary Care Networks at scale – a massive undertaking. Frankly, under these burdens, Reeves’ pension tax reversal won’t matter.
“To keep GP talent in the NHS and prevent staff from heading for the doors, Reeves needs to take a close look at its pension system and look to mollify all its inefficiencies currently raising staff frustrations to the max. Plus, let me tell you, placing caps on tax-free lump-sum pension withdrawals will only cause more damage.
“We’re about to head into another winter with the NHS, where the demand for GP services will undoubtedly spike. At the moment, Reeves is only alienating GPs across the country – and, unless she changes tack this Autumn Budget, uncertainty will only continue to run rampant across our NHS.”
