The British Medical Association (BMA) has warned that the new pension changes to be brought in in 2016 could cost GP practices around £80m a year in higher employer and employee National Insurance (NI) rates.

According to the BMA, the threat to pensions comes from the abolition of the second state pension in 2016 and the consequent end of NI rebates for NHS Pension Scheme members, who do not qualify.

At the moment, doctors in the NHS do not accrue a state second pension because they are paying into the NHS pension scheme, which is ‘contracted out’. In return, members and employers receive an NI rebate, which translates into lower contributions.

In a letter to Treasury Minister, Danny Alexander, BMA Chairman, Dr Mark Porter, said that this state of affairs ‘would be impossible for GP practices to absorb’ and asked Mr Alexander for his assurance that the costs would be met with a “commensurate increase to practice funding’.

In response, Mr Alexander said that he recognised the impact the change would have on GPs but added that Government spending and department budgets were yet to be set beyond 2015/16, and that the NI increase would be ‘taken into account at the appropriate time as part of a wider consideration of how best to deliver public services’.

Meanwhile, in a separate development, the BMA, alongside other health unions and NHS Employers, warned that possible changes to the valuation of NHS pensions could lead to a ‘multi-million pound funding gap’ that would have to be plugged by increased employers’ contributions.

The unions say that calculations, such as salary rises, that are being used by Treasury officials to predict the future cost of the scheme could leave a shortfall of £1.7bn for NHS employers to pick up.

For those GPs who are concerned about the changes to pensions which are set to be introduced in 2016, or for healthcare professionals who wish to discuss pensions, our experienced team of accountants and tax advisors at HSP Nicklin can assist.