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<p>The Department recognises that the annual allowance may contribute to decisions
from National Health Service consultants to retire early or limit their NHS commitment.
The Government is listening carefully to concerns raised by senior doctors and NHS
employers about the tapered annual allowance.</p><p>In September 2019 guidance was
issued by NHS Employers informing employers of the short-term approaches that they
could take to mitigate the effect of pension tax on their workforce this tax year.
The NHS has also implemented an immediate measure to preserve clinical capacity amid
the increased pressure on services during the winter period. This will compensate
NHS clinicians for the effect on their pensions of annual allowance charged incurred
in 2019-20.</p><p>The Department has consulted on introducing flexibility within the
NHS Pension Scheme from 2019/20 to allow clinicians affected by annual allowance tax
charges to reduce their pension accrual in deciles in order to manage any potential
annual allowance tax charges.</p><p>As part of a wider drive to ensure the NHS has
the staff it needs to meet demand and transform care, the Government is carrying out
an urgent review of the pensions annual allowance taper problem that has caused some
doctors to turn down extra shifts for fear of high tax bills. On 13 January, Ministers
held a roundtable with the Academy of Medical Royal Colleges, the British Medical
Association and other representative organisations as part of this review to find
a long-term solution.</p><p>The review will consider the findings from the Department’s
consultation on pension flexibility and will report at the Budget on 11 March.</p><p>
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