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GPs face huge pension tax bills this year after rise in inflation

BMJ 2022; 377 doi: (Published 25 May 2022) Cite this as: BMJ 2022;377:o1297
  1. Ingrid Torjesen
  1. The BMJ

Some GPs will face pension tax bills of almost half their post-tax income this tax year, and many will have to pay the charge for the first time because of soaring inflation, the BMA has warned.

It has modelled GPs’ annual allowance charges on the basis of the consumer price index (CPI) hitting 10% this year. It is currently 9%,1 and the Bank of England predicts that it will pass 10% in October.2

The modelling indicates that, with CPI at 10%, a GP who has built up a pension of £46 300—close to the lifetime allowance—and has pensionable earnings of £115 000 will face a pension tax bill of £32 349 for exceeding their annual allowance (fig 1). But even a GP who has accrued a £20 000 pension and has earnings of £70 000 will be hit by a £6771 charge. Individual GPs can use a new tool on the BMA website to find out how they will be affected.3

Fig 1

Example increase for a GP with a taxable income …

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