NHS pension rules may prompt ‘mass exodus’ of leaders in next two years, report suggests

28 Jan 2020 By Maggie Baska

Significant number of trust managers plan to leave the health service, with others now less willing to accept promotions and take on leadership roles

More than two in five senior NHS leaders either plan to or are considering leaving the health service because of recent pension changes, a report has suggested, warning of an “exodus” of leaders and managers in the next two years. 

A survey of trust executive directors by NHS Providers, which received responses from 188 of the 223 trusts in England, found 44 per cent of NHS leaders planned to leave the health service because of the pensions crisis.

And 37 per cent of the directors polled said fewer staff were seeking or accepting promotions, while 60 per cent said clinicians were now less willing to take on leadership roles as a result of pension taxation rules.

Seven in 10 clinical executives reported turning down, or would consider turning down, promotions or additional leadership responsibilities.

While the effect of the pensions dispute on frontline clinical staff has been widely reported, NHS Providers said this survey showed the impact it was also having on non-clinical leaders.

The issues around NHS pensions stem from regulations introduced in 2016 limiting the sums that could be paid into public sector pension pots by high earners without losing tax relief. Workers who earned more than a £1.1m lifetime allowance for pension saving were moved into a higher tax bracket, effectively making it detrimental to their finances to continue working.

Get more HR and employment law news like this delivered straight to your inbox every day – sign up to People Management’s PM Daily newsletter

The changes have led to rising numbers of consultants retiring early or not taking additional shifts to keep their earnings down.

An interim solution for clinical staff was announced in December, but no such relief has been provided for non-clinical staff. A permanent solution is expected to be announced in the March budget.

The report warned there would be a significant adverse effect on the running of NHS services if non-clinical staff were exempt from this solution. More than nine in 10 (91 per cent) respondents said they were concerned that having different pensions arrangements for different staff groups would create divisions in the workforce, harm staff morale and hurt organisational culture.

Saffron Cordery, deputy chief executive of NHS Providers, welcomed the changes the government has introduced to reduce the impact of pension taxation rules on the clinical workforce, but warned they did not address wider workforce challenges.

“Without urgent action, we face the possibility of an exodus of NHS leaders, at a time when the need for their experience, skills and commitment has never been greater,” he said.

Dr Vishal Sharma, pensions committee chair for the British Medical Association, said the current pension rules meant both doctors and NHS leaders were “effectively penalised for going to work”. 

But he warned that careful consideration was needed to identify the right solution. “Increasing the threshold income, as has been reported as a proposal in recent weeks, is not the answer and does nothing to address many of the problems highlighted by this survey,” he said.

A “proper solution” would be to scrap the annual allowance in defined benefit schemes, such as the NHS pension scheme, he said.

NHS Providers said a fair solution would include a change to the pension taper and addressing the impact of an annual allowance for all staff moving into senior roles or receiving pay increments.

Strategic People Manager

Strategic People Manager

Strathclyde Business Park, Bellshill, Homeworking

£65k - £70k

Edge Testing

Head of Joint Human Resources

Head of Joint Human Resources

Currently Wootton Hall Park, Northampton, pending relocation to Wellingborough, Northants

£71,643 to £76,791

Northamptonshire Police

Regional People Partner

Regional People Partner

Surrey / Oxfordshire / Greater London / West Sussex

Leadership 1 £40,000 - £52,000

GLF Schools

View More Jobs

Explore related articles