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GPs ‘face £200k extra pension costs’


20 August 2011

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GPs could face paying more than £200,000 extra in pension contributions over the course of their careers for a worse deal on retirement, research commissioned by the BMA shows today (19 August 2011).

The BMA commissioned actuaries to examine the potential impact of government proposals to increase the amount NHS staff pay for their pensions.

GPs could face paying more than £200,000 extra in pension contributions over the course of their careers for a worse deal on retirement, research commissioned by the BMA shows today (19 August 2011).

The BMA commissioned actuaries to examine the potential impact of government proposals to increase the amount NHS staff pay for their pensions.

Under the plans, a doctor currently contributing 8.5% of salary would contribute 10.9% by 2012, and possibly as much as 14.5% by 2014.

The modelling calculates the additional contributions doctors would need to make over the course of their careers.

A junior doctor currently aged 25 pursuing a typical career as a GP and retiring at the future state pension age of 68 could have to make additional contributions of more than £230,000 between now and retirement.

The researchers also modelled the impact of the proposals put forward by Lord Hutton in his review of public sector pensions, such as a further increase in the normal retirement age and a move from final salary to career average schemes.

The modelling indicates that a GP currently aged 25 retiring at the age of 60 would receive a pension around £20,000 lower than the final salary pension they would receive under current arrangements.

BMA Chairman Dr Hamish Meldrum said: "These are unjustifiable changes to a financially healthy pension scheme which has only recently been thoroughly overhauled.

"This isn't about affordability, it's about the Treasury looking for yet another quick hit from public sector workers."

The modelling also looks at the impact of the decision, already implemented, to increase pensions payments in line with the Consumer Price Index rather than the Retail Price Index.

The BMA research claims that a doctor retiring at the age of 65 could be worse off under CPI by £2,000 a year at the age of 70, and by a total of £124,500 by the age of 85.

"Doctors pursuing a career as a GP will have to pay significantly higher contributions in return for a much reduced pension at retirement," the paper concludes.

The government is expected to set out specific plans based on Lord Hutton's recommendations in the Autumn.

Your comments (terms and conditions apply):

"GPs are not on a final salary scheme but a career average but apart from that very frightening and amounts to theft in my books" – Calum Bartlett, Brighton

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