Warning Labour's pensions bombshell will lead to an 'exodus' of NHS staff

Keir Starmer has been warned that his pensions policy will lead to an NHS staff “exodus” as he prepares to reverse a recent pensions tax break introduced by Jeremy Hunt.

Labour is committed to reintroducing the lifetime allowance cap on pensions, which limits the amount people can save in their pensions before losing tax relief.

The Tories scrapped the lifetime allowance in April this year after being announced in 2023’s March Budget.

A welcome relief to high-earning public sector workers such as doctors, the move abolished the brutal 55% charge on anyone who saves over £1,073,100.

However this morning experts are warning that Labour’s plans to reintroduce the policy is already leading key NHS staff to look at taking an early retirement to avoid the tax.

Rachel Reeves, who wants to hit hard-working pensioners with the pernicious tax, insists that their solution will attempt to include a workaround for NHS workers to avoid senior doctors leaving the workforce.

Now Labour’s own tax policy threatens to undermine its other commitment to reduce NHS backlogs of patients waiting more than 18 weeks for treatment.

Should there be an “exodus” of NHS staff ahead of the lifetime allowance’s reintroduction, Labour will struggle to meet this key commitment.

Responding to the report, Health Secretary Victoria Atkins warned: “Wes Streeting admitted that the tax on doctors’ pensions was ‘crazy’ and scrapping the unfair tax would ‘inevitably save lives’. Yet Labour will reintroduce the Doctors Tax if they win the election because they don’t have a plan to support the workforce, driving out experienced professionals, increasing waiting lists and taking the country back to square one"

“Under the Conservatives, we have delivered record numbers of doctors and nurses in our NHS, and we published the first ever NHS workforce plan to ensure we have the staff we need to deliver quality care for patients for generations to come.

“Only Rishi Sunak and the Conservatives have a clear plan and are taking the bold action to support the NHS workforce and secure the future of our health service. Under Keir Starmer, there would be an exodus of experienced doctors and nurses, taking patients back to square one.”

Experienced NHS staff have now told i news that without certainty from Labour on how such a health work-around will operate, they will opt to retire this summer, take their pensions sooner, and avoid potentially losing tens of thousands of pounds to the taxman.

Shadow Treasury minister Darren Jones has said that health professionals will have to wait another few weeks before finding out any further information from the party’s manifesto.

NHS pension expert Graham Crossley says: “The potential reinstatement of the lifetime allowance (LTA) has caused considerable anxiety among doctors, many of whom stand to lose thousands from their hard-earned pensions”.

“While there are whispers of exemptions for doctors and other public sector workers, the ambiguity surrounding these promises is causing many to consider early retirement to avoid the financial uncertainty.”

“The need for detailed information is urgent. Our members are already making their decisions, with many opting for retirement in the face of this uncertainty.

"Clarity and assurance are needed now to prevent a mass exodus of experienced and valuable healthcare professionals”.

58-year-old consultant radiologist Dr Julian Elford also told the i that the lack of pensions tax clarity from Labour will soon lead him to taking partial retirement, and cut his hours.

He warned: “I’m right in the area to be affected by the potential changes and it could cost me tens of thousands of pounds. The downside of taking my pension now on the other hand is very low. If there’s not clarity soon, I will take partial retirement and start taking my pension.”

“My message to Labour and Wes Streeting is, ‘you really need to get the message out. Uncertainty means doctors will go with the certainty, and that means taking their pensions early’.”

The Government abolished the Lifetime Allowance specifically to help retain doctors in the NHS and improve the number of appointments and surgeries available.

Sir Keir Starmer was also blasted after it emerged that none of his £1 million public sector pension pot will be subjected to the lifetime allowance, thanks to a bespoke law passed for him after his time as Director of Public Prosecutions.

Express columnist Harvey Jones previously slammed the Labour leader’s hypocrisy, observing: “There is no lifetime cap on his pension, but he's happy to impose it on others. Including, it seems, desperately needed NHS doctors”.