Contribution hike unjust for financially healthy NHS pension scheme, BMA warns

18 April 2011

The BMA has written to the government to make clear that further sharp increases in the amount doctors have to pay for their pensions are unnecessary and may result in many retiring early.

The BMA has seen figures from the Government’s Actuarial Department showing that the amount doctors pay into the NHS pension scheme, which already increased sharply in 2008, could almost double by 2015. They indicate that the government’s intention to increase overall contributions into the NHS scheme by 3% would hit doctors particularly hard. Those currently paying 7.5% or 8.5%, could see their contributions increase to 13% or 15.5% by 2014-5.

The increase in pensions contributions for public sector workers, intended to raise £3.2 billion a year for the Treasury by 2014-15, was announced in the Comprehensive Spending Review in November. This was before publication of Lord Hutton’s review which recommended further changes to public sector pensions, including linking the retirement age to the state pension age, and replacing the final salary scheme with a career average earnings scheme.

Dr Hamish Meldrum, Chairman of BMA Council at the BMA, said:

“NHS staff feel that their pension is under attack on several fronts. Doctors are likely to be particularly badly affected, with a threat for many of seeing their contributions double, possibly for a poorer pension, and having worked an extra eight years. This cannot be justified given that the NHS pension scheme underwent a major overhaul only three years ago, and is in very good financial health.”

Dr Meldrum’s letter to Cabinet Office Minister Francis Maude questions whether the NHS pension scheme is in need of reform, given that it currently generates a surplus to the Treasury. It points out that many doctors in their fifties, who are eligible for early retirement, will consider their futures if the NHS pension ceases to be attractive.

There has been a sharp increase in the numbers of doctors contacting the BMA with queries about pensions. The number of phone calls to the BMA’s Pensions Department was 1083% higher in the first quarter of 2011 than the first quarter of 2010, and the number of emails and letters was 437% higher.