How Has Pension Legislation Affected NHS Breast Cancer Treatment Wait Times? Some Odd News From The UK

Here’s a headline one doesn’t see every day:

“Pensions crisis blamed for trust’s worst-ever breast cancer waits.”

That’s from the UK journal HSJ and, yes, I am not an expert on the issue but merely stumbled upon it.

What’s going on?

“In June, Worcestershire Acute Hospitals Trust saw just 4.6 per cent of patients referred with breast symptoms within two weeks. This is the lowest result ever reported by the trust, HSJ can reveal.

“Trusts are expected to see 93 per cent of such patients within two weeks to promote early breast cancer detection. . . .

“Worcestershire last hit the target in February this year, when 96 per cent of breast symptom patients were seen within two weeks, according to earlier board papers. Since May, its results have ranged from 4.6 to 23.6 per cent.”

And what does this have to do with pensions?

Here’s an explanation from The Telegraph this past August:

“New rules mean GPs and consultants can be hit with tax rates of more than 90 per cent on their earnings – including their pension contributions – if they earn more than £110,000 a year.

“It means consultants are substantially cutting back on any overtime or weekend work as they can be taxed thousands for earning a penny over the threshold. . . .

“A survey by the British Medical Association found that 42 per cent of GPs and 30 per cent of consultants have cut their hours because of the pensions rules.

“Waiting lists have soared by 50 per cent in three months in some parts of the country because doctors are refusing to work, in order to protect their pensions, senior managers have warned.

“In one case, a doctor who breached their £110,000 threshold income, by just £3, after doing an additional shift, triggered a £13,000 tax pensions tax charge, even though the extra income was not pensionable.”

London financial newspaper City A.M. further explains

“The tapered allowance was introduced by George Osborne in 2016 to limit the amount of tax relief available to high earners. While the standard annual allowance (the amount you can pay into your pension without being taxed at your marginal rate) is £40,000, the pensions taper means that anyone earning more than £150,000 a year sees their tax-free annual allowance gradually reduced.

“Essentially, for every £2 your adjusted income goes over £150,000, your annual allowance for that year falls by £1. . . .

“The general public doesn’t usually have much sympathy for high earners in receipt of gold-plated pensions, but the issue hit the headlines when senior doctors and consultants started choosing to simply avoid the risk of massive tax penalties by turning down overtime, or even retiring early.

“The costs of exceeding the limit can be huge. In some cases, doctors and nurses have ended up worse-off for doing overtime, and there have been reports of people having to remortgage their homes to foot the tax bills.”

Now this all sounds preposterous, for the government in the UK to have designed a tax structure in such a manner as to actively discourage doctors from working overtime. How could anyone have done so, and why can’t they just unwind the mistaken legislation?

But this is, of course, not as simple as the British having made a mistake in their taxation structure. As the various candidates for president of the United States announce the ways in which they’d radically transform the tax system in the US, it’s a useful reminder of the risk of unintended consequences, however well-intentioned a plan may be, however noble in its desire to structure taxation in what’s intended to be the most moral manner possible. In fact, this ought to be a useful object lesson and a reminder to assess skeptically any grand plan a politician proposes.