Budget sees pension tax concerns addressed as workforce plan still awaited

  • 24 Mar 2023
  • Jordan Marshall, Policy Manager

Ophthalmologists affected by taxation on NHS pensions will be pleased by the government’s announcement of changes to the Lifetime and Annual Allowance, directly aimed at preventing more NHS doctors retiring early or reducing hours. The government also reconfirmed it will shortly be publishing its long term NHS workforce plan.

The Budget is a major set-piece event where the UK government announces its major tax and spending decisions. Chancellor of the Exchequer Jeremy Hunt presented his 2023 Spring Budget last week, with two key areas of note for the ophthalmology and wider health community.

Welcome pension tax reforms

Many ophthalmologists and other NHS doctors have expressed their concerns for some time that the system of pension taxation encouraged early retirement or reductions in working hours. RCOphth has likewise highlighted this issue for a number of years, including following the 2020 Budget. 

The Chancellor’s confirmation that from April 2023 the Annual Allowance will increase from £40,000 to £60,000 with the Lifetime Allowance being removed is therefore welcome. In his speech to Parliament, the Chancellor said that these changes would ‘stop over 80% of NHS doctors from receiving a tax charge’. 

While there are many reasons why retaining senior ophthalmologists is a challenge, not least because under-staffed and under-resourced working environments make the role stressful, these changes should help remove one unnecessary blocker to having sustainable workforce capacity. 

Workforce plan expected soon

One thing we didn’t hear from the Chancellor was details of the long-awaited Long Term NHS Workforce Plan, including projections on the numbers needed and whether funding would be provided to deliver these. 

As we updated you in November 2022 following the Autumn Statement, we were pleased that the government had listened to sector-wide calls for action on workforce planning and committed to publishing a workforce plan during 2023 which would include ‘independently-verified forecasts for the number of doctors, nurses and other professionals that will be needed in 5, 10 and 15 years’ time’. 

Conversations have been ongoing since then about what exactly will be in this plan and when it will be published, which RCOphth has been feeding into. We believe it is essential that this plan provides the requisite detail and funding to properly inform workforce planning, including the number of medical schools and speciality training places needed. 

The Budget saw the Chancellor confirm that the government would be publishing this workforce plan ‘shortly’ – we will update you on the key points when they do.