AFTER months of campaigning from doctors, the Scottish and UK governments seem finally to have found a solution to the pensions crisis that was threatening to bring the NHS to its knees.

The way pensions tax allowances have been structured for the past three years means anyone earning over £110,000 can be hit with a disproportionately high tax bill related to the amount of money being saved into their pension each month. Senior doctors taking on extra shifts have been among the worst affected.

Having seen some colleagues pay more in tax than they have earned in overtime - and in some instances have to remortgage their homes in order to meet their bills - many have chosen to shun the extra work the health service has come to rely on.

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With a staffing crisis looming, the UK Government has said it will pay the additional tax bills incurred by affected doctors south of the Border while the Scottish Government will from next month allow clinicians to have their employer’s pension contribution added to their pay packets rather than their pension pots.

On the face of it they seem like reasonable fixes and Graeme Eunson, chair of the British Medical Association’s Scottish Consultants Committee, welcomed Holyrood’s move.

“As we enter the crucial winter period it will help protect patient care, keep our emergency departments staffed and deal with challenging waiting lists,” Mr Eunson said.

“These are the vital NHS services that have been suffering as doctors are forced to cut their hours out of fear of a perverse tax system that essentially makes them pay to go to work.”

They are hardly satisfactory solutions, though. Gary Smith, chartered financial planner at advisory business Tilney, pointed out that as both measures are being introduced on a temporary basis only, all they are doing is “kicking the can down the road to next year”.

Steve Webb, director of policy at Royal London and a former pensions minister in the coalition government, agreed, noting that the Westminster plan in particular “amounts to a bizarre money-go-round with one part of the public sector paying money to another in order to resolve a short-term crisis”.

Worse still, while the tapered annual allowance that is causing all the problems has the potential to impact on all public sector workers - who cannot alter the proportion of salary paid into their pension each month - these fixes apply to NHS staff only. Though in August it was revealed that thousands of members of the Armed Forces Pension Scheme had also been affected, with personnel similarly avoiding promotion to prevent being hit, neither they nor any other public sector worker can take advantage of the measures.

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Jon Greer, head of retirement policy at Quilter, said this is controversial because “it offers NHS staff special treatment and ignores large swathes of high-earning public sector workers who provide critical services every day such as judges, teachers and transport workers”.

The problem arose in the first place because the Westminster Government, which sets pensions policy for the whole of the UK, wanted to stop the wealthy benefiting disproportionately from tax breaks designed to encourage pension saving.

Everyone is entitled to tax-free pensions savings of £40,000 a year, but the legislation introduced in 2016 sees that annual allowance taper down to £10,000 for anyone earning over £110,000. The complicated way the charges are calculated if those limits are breached makes the penalties particularly punitive.

The UK Government has been trying to find a solution to the problem for the NHS for several months, initially consulting on allowing doctors to halve the amount they save into their pension before ditching that in favour of a plan that would have allowed senior practitioners to choose the amount they contributed themselves while retaining their full employer contribution.

For Mr Webb, such tinkering only highlights what pensions experts have been saying since the taper was first introduced: it is an overly complicated measure that in practice has proven to be unfit for purpose.

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“The Treasury could have avoided all of these problems if it had simply admitted months ago that the pension tax relief system is too complex and had abolished the tapered annual allowance altogether,” he said.

Mr Smith agreed, and has called on all political parties “to make their position on the tapered allowance and how they intend to address this very clear in their upcoming manifestos”.

Whether they are up to that task or not remains moot, with the Liberal Democrats this week saying only that they would “listen and act” on the NHS pension crisis while the Labour Party made no mention of it all. The Conservatives, meanwhile, have yet to reveal their hand.