GPs likely to be hit by pension changes
New research published by Wesleyan Medical Sickness shows that almost half of GPs surveyed (48%) do not understand how changes to the way in which pensions are taxed will impact on their own pension. From 6 April the annual allowance drops from £255,000 to £50,000 and from April 2012 the lifetime allowance reduces from £1.8m to £1.5m.
The research also shows that one in four do not realise that these changes could lead to larger tax bills and nearly one in five aren't even aware of the new pension rules.
Phil Mileham, National Sales Manager at Wesleyan Medical Sickness said: "This is a complex area and one which many GPs are too busy to get to grips with. However these changes to pension allowances could impact GPs quite severely, especially as they progress through their career. Anyone exceeding the annual allowance will have to pay income tax on the excess at their marginal rate of tax which is likely to be 40% or 50% for most GPs.
"Our research also showed that 86% of GPs surveyed want to retire on an annual income in excess of £36,000 yet over one third don't fully understand their current pension arrangements. We would recommend that GPs take regular financial advice to ensure their pension plans remain viable and they can enjoy the kind of retirement that they have worked for so hard."
Dr John Canning, of the Wesleyan Medical Sickness Advisory Board added: "GPs work long hours in a stressful job where we have to keep on top of changes in medicine, as well as what is going on within our own profession.
"It's not easy to also find time to keep up with changes that can affect our personal finances which is why it's important for GPs to take good advice regularly to ensure they have in place robust plans to see them through to retirement and beyond. Recent changes make it even more important to ensure they have reviewed their arrangements in the last year."
Wesleyan Medical Sickness provides specialist financial advice, products and services to GPs, hospital doctors and dentists.