The scrapping of the lifetime allowance cap on tax-free pensions in yesterday’s Budget is aimed specifically at tackling the exodus of senior medics from the NHS
The Lifetime Allowance (LTA), dubbed the “doctors’ tax”, currently stands at £1.07 million and will be abolished from April 2024.
Chancellor Jeremy Hunt told parliament he had listened to the concerns of senior doctors who had complained that the LTA was “making them leave the NHS”. He added: “I do not want any doctor to retire early because of the way pension taxes work.”
He also announced that the annual pensions tax-free allowance will rise from £40,000 to £60,000, arguing that “no one should be pushed out of the workforce for tax reasons”.
Both the Money Purchase Annual Allowance and the Tapered Annual Allowance will also be raised from £4,000 to £10,000.
