On the go: The Liberal Democrats have pledged to find a solution for the pensions crisis driving senior NHS staff to turn down extra work, but stopped short of any commitment to end the annual allowance taper.
The party said it would “listen and act” on the pensions crisis “driving away our most experienced clinicians and worsening waiting times and the workforce crisis", in its manifesto released on Wednesday.
Introduced in 2016, the tapered annual allowance for tax relief on pension contributions gradually reduces for those on high incomes, meaning they are more likely to be hit by a charge from HM Revenue and Customs.
Doctors working extra shifts to cover critical services can therefore trigger charges and effective marginal tax rates of more than 100 per cent.
Scheme-specific changes, proposed in June and then revised in September, have suggested letting NHS staff fine-tune their accrual to avoid the charges and take remaining contributions as extra pay. However, doctors have said this will not be enough to solve the problem, and have called for the abolition of the taper.
Tom Selby, senior analyst at AJ Bell, said: “Although political parties acknowledging that the pension tax regime is exacerbating strains in the NHS is good news, nobody seems willing to back the obvious solution – namely scrapping the annual taper altogether. This is somewhat perplexing.
“It may be that the major parties simply don’t like the electoral optics of removing something which places an extra tax burden on higher earners. But with patients’ lives potentially being put at risk, we need politicians to show real leadership in this area.”
The manifesto also repeated a previous pledge to help women born in the 1950s, who were the first to be affected by a sharp rise in the state pension age. The party promised to ensure Waspi women were “properly compensated for the failure of government to properly notify them of changes to the state pension age”.
The Lib Dems also proposed more regulation in financial services to encourage green investments.
This would include requirements on pension funds and managers to show their portfolio investments were consistent with the Paris Agreement, alongside new powers for regulators to act if banks and other investors do not manage climate risks properly.
On Tuesday, the Green Party pledged a radical overhaul of the tax system while offering a number of pensions solutions.
