The impact of annual allowance and lifetime allowance pensions tax charges on clinical capacity in the NHS is well documented, with evidence of large numbers of consultants reducing their hours or the number of additional sessions they are willing to do, creating a significant effect on the effective running of NHS services.

While some trusts have implemented local flexibilities and made them available to all staff affected by tax bills regardless of role, both recently announced 2019/20 tax reimbursements through Scheme Pays and national level flexibilities are currently only available to clinicians.

The pensions taxation issue must be seen within a wider context of low morale, high and stressful workloads, and growing pressure on staff wellbeing. The dispute about pensions and the consequent impact on clinical capacity, as consultants reduce their working hours, has highlighted a wider issue about the significant pressure NHS services are under, and has revealed how heavily services rely on the additional discretionary efforts of staff who regularly work beyond their hours to keep services running. The situation has been exacerbated by the already fragile morale of the workforce, and there is a growing sense that recent concerns over pensions taxation have acted as the 'final straw' for many in the NHS, triggering decisions to leave the workforce, reduce hours or draw back from career progression. This underlines the importance of addressing wider workforce challenges, and taking a holistic and longer term approach to managing these issues.

There is a real risk of divisiveness and a further impact on staff morale if a comprehensive solution is not agreed.


NHS Providers has long been calling for a comprehensive solution to the issue that takes into account all NHS staff. We remain very concerned both about the effectiveness of the proposals on the table to mitigate the impact for clinicians, and about the impact of the current pension arrangements for leaders and managers within the NHS. There is a real risk of divisiveness and a further impact on staff morale if a comprehensive solution is not agreed.

The government and national bodies have told us they are keen to further understand the evidence of the effect of tax bills issued to managers and non-clinical board level roles on frontline services, and operational performance, before determining whether scheme flexibilities should be extended to these groups. We welcome this and hope that the survey results within this briefing will support further constructive discussions.

This briefing summarises the findings of a survey sent to all executive directors of the 223 trusts within the provider sector, and describes the evidence of the significant impact of annual allowance taxation on managers, on morale within the NHS and the consequent impact on services and frontline care.