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Whither the LTA ?

PhaseThree
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Whither the LTA ?

#236635

Postby PhaseThree » July 14th, 2019, 7:12 pm

(Yes I know it's Men's Finals day at Wimbledon but I was thinking of the pension Life Time Allowance rather than the Lawn Tennis Association.)

Recently there seems to have been an increase in media/political focus on the effect the last set of pension rule changes is having on public services. Specifically there are reports of senior NHS medical staff refusing to take on extra shifts due to the detrimental effects of the annual allowance taper and the lifetime allowance. Similar problems are being reported with the Judiciary, Firefighters and Armed Forces.

Ex-womble and PM-almost-elect Boris has promised to fix things stating “This is something I have raised repeatedly, the £1.1m pension cap, which is affecting doctors and other people. It’s obviously wrong, it’s causing a real problem, I have raised it repeatedly with the Treasury and they keep telling me they’ve addressed it but the headlines show it has not been addressed, and we will fix it, we will fix it.”.

I can't help noting he's promised an awful lot to a lot of people in the last few weeks but maybe the threat of the NHS hitting problems may mean this is real.

A Ms Truss has further stated “The government are taking this issue very seriously, However, the House will recognise that the same tax rules must apply identically to everyone in the same situation, regardless of their employer. It is simply not possible for the tax rules applying to senior clinicians in the NHS to be different from those that apply everywhere else.”

Personally I have a vested interest in seeing the LTA vastly increased or abolished altogether, but am too old to trust the words of a politician wanting to be elected. Does anyone have any thoughts on this ?

Alaric
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Re: Whither the LTA ?

#236640

Postby Alaric » July 14th, 2019, 7:40 pm

PhaseThree wrote: However, the House will recognise that the same tax rules must apply identically to everyone in the same situation, regardless of their employer. It is simply not possible for the tax rules applying to senior clinicians in the NHS to be different from those that apply everywhere else.”


The NHS can write its own rules for how its pension scheme operates. What it may have to do is to make additional earnings or even all earnings for some senior people non-pensionable.

Alternatively the Government could accept the bizarre effect of the tapering rules and modify or abolish them for everybody.

Chrysalis
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Re: Whither the LTA ?

#236650

Postby Chrysalis » July 14th, 2019, 8:38 pm

There’s a lot of misinformation about the current NHS issue, which is about the tapered annual allowance which may be triggered by doctors doing voluntary overtime and for which there is no easy ‘quick fix’. The overtime payments are not in themselves pensionable, but may trigger a reduced annual allowance which then attracts a tax charge which can easily be far more than the overtime payments. Hence the rational response, to refuse extra work. It is the loss of the work which is causing the NHS problems.

I can see one potential solution being to restrict the DB pension membership to the first £X,000 of salary. This already happens in the university pension scheme, where the DB part only applies to pay up to about £50k. It would be a radical solution though and a bit of a sledgehammer to crack a nut.

gryffron
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Re: Whither the LTA ?

#236844

Postby gryffron » July 15th, 2019, 4:59 pm

The usual unintended consequences from the hideously overcomplicated Pension rules. And the government's answer will no doubt be to introduce even more complications, with even more unintended consequences.

:roll:


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