Pensions: Doctors welcome government’s decision to abolish lifetime allowance
BMJ 2023; 380 doi: https://doi.org/10.1136/bmj.p625 (Published 16 March 2023) Cite this as: BMJ 2023;380:p625
- Gareth Iacobucci
- The BMJ
In his spring budget for 20231 the UK chancellor Jeremy Hunt unveiled a major policy for tackling the number of senior NHS doctors reducing their hours or taking early retirement because of high taxation charges on their pensions.
In a surprise move, Hunt announced a package of measures, including scrapping the lifetime allowance on how much can be saved tax free in an NHS pension and raising the threshold for the annual allowance.
What changes has the government announced?
From April 2023 the lifetime allowance on how much can be saved tax free in an NHS pension will be removed. It will be abolished entirely from April 2024 in a subsequent finance bill. Hunt had been expected to lift the cap on how much can be saved tax free from £1 073 100, but instead opted to scrap the charge. The maximum Pension Commencement Lump Sum (the amount you can take out as a tax free lump sum when taking benefits) will stay at the current level of £268 275 and will be frozen thereafter, the Treasury added.
Alongside this, the annual allowance (the amount of money that can be put in a pension pot tax free …
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