Doctors have threatened strike action if Rachel Reeves decides to slash a 25 per cent tax free lump sum despite offering workers in the sector inflation-busting pay hikes.
Two unions, including the British Medical Association, have informed the Chancellor that this decision would increase waiting lists and trigger strike action across the country.
The warning accompanied an accusation against the Labour Government, claiming that it is attempting to “claw back” the money it had previously spent on pay rises during the summer.
BMA pensions committee chair Dr Sharma told The Telegraph: “A move to cut the tax-free lump sum is not only unfair for those who have been planning for retirement based on existing tax rules, but it could also severely undermine ongoing efforts to reduce waiting lists.
The warning accompanied an accusation against the Labour Government, claiming that it is attempting to “claw back” the money it had previously spent on pay rises in July (Stock image)
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“If such a move is announced this would likely result in an exodus of our most senior doctors, with them making immediate plans to retire before any changes take force.”
“After a number of pay deals that began the process of restoring lost pay were reached for doctors earlier this year, clawing back this money from our pensions would reverse this progress.”
Currently, the majority of savers can retrieve a quarter of their pension pot without tax once they turn 55, which applies to amounts up to £268,275.
However, Rachel Reeves is contemplating a change that would see this tax-free sum reduced to £100,000, with think tanks estimating that this would bring in approximately £2billion into the Treasury.
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A 1995 pension scheme forced NHS workers to receive a lump sum once they retired.
However, the most senior doctors are often forced to receive sums larger than £100,000 when they reach retirement.
Younger doctors are not subjected to this scheme, with newer pension systems in place for them.
As a result, it has been suggested that many of these more senior medics would opt for early retirement to avoid being taxed on the figure.
Health Secretary Wes Streeting offered junior doctors a pay rise to end the longest junior strike in NHS history, lasting 15 months causing turmoil across the nation
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Previously, Health Secretary Wes Streeting offered junior doctors a pay rise to end the longest junior strike in NHS history, which lasted 15 months, causing turmoil across the nation.
In July, junior doctors across England voted to accept the Government’s inflation-busting 22 per cent pay increase.
During the election campaign, Labour pledged to cut NHS waiting times with 40,000 more appointments every week, making the NHS “fit for the future”.
The latest NHS figures have shown waiting times plateauing around approximately 7.6 million.