Govt in 'quick fix' move to pay NHS workers' pension tax bills

Tapered annual allowance headache

Jenna Brown
clock • 2 min read

The government is to pay the tax bills of NHS workers caught out by changes to pension contribution limits who have been turning down additional work for fear of running up large tax bills.

It is hoped the move will see GPs and consultants return to taking extra shifts this winter. Royal London said the government plans indicated the tax bills incurred by doctors this year will be covered by the NHS pension scheme under the ‘scheme pays' process. This would normally result in a reduced pension at retirement but the government will make good any reduced pension. However, because the NHS pension scheme is unfunded - in other words, there is no money in the scheme - the NHS pension scheme will need to ask the NHS to provide the money to pay the tax bills to the Treasury.  W...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Pensions

Budget Media Watch: Healey to raise tax-free allowance for low-income state pensioners

Budget Media Watch: Healey to raise tax-free allowance for low-income state pensioners

Not expected to tinker with tax-free lump sum

Jen Frost
clock 26 October 2026 • 2 min read
Mind the gap: Why advisers have a key role in closing the gender pension divide

Mind the gap: Why advisers have a key role in closing the gender pension divide

'While access to pensions has improved, barriers remain'

Julia Peake
clock 22 October 2026 • 5 min read
Planning points: Paying pension funds to charity on death

Planning points: Paying pension funds to charity on death

IHT on pensions may create opportunities for charitable giving

Martin Jones
clock 16 October 2026 • 3 min read