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Doctors Pensions

Community Veteran
Posts: 7,149
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Registered: 30-08-2007

Doctors Pensions

When in my GP's surgery <we get on with a first name basis very well> I quite often, when it is in the news tease him gently about doctors pay, in the best possible taste of course!! My GP told me recently he was actually self-employed. Somewhat shooting my joshing down in flames.
Anyone else, in this happy position where your GP should be unlikely to indulge in the up-coming industrial action by doctors?
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15 REPLIES
BryanP
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Registered: 21-11-2011

Re: Doctors Pensions

As a pensions expert I know what doctors and dentists can do in the pension planning area, if the public was aware of what they can retire on under the current legislation they would be really surprised.
My take on this is if the private section has been forced to up their retirement age from age  65 to (still climbing) and women being forced to increase their retiremnet age from 60 to 65 and then plus why can't the public sector follow suit, why are the public sector special?
Community Veteran
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Registered: 12-08-2007

Re: Doctors Pensions

Quote from: Petlew
I quite often, when it is in the news tease him gently about doctors pay, in the best possible taste of course!! My GP told me recently he was actually self-employed. Somewhat shooting my joshing down in flames.

GPs are contractors and paid by the NHS.  It is a complicated system of pay they receive which is negotiated for them by the BMA.  The average pay for a GP is now in excess of £100k. Some of the high fliers can earn in excess of £300k.
Community Veteran
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Re: Doctors Pensions

Quote from: BryanP
As a pensions expert I know what doctors and dentists can do in the pension planning area, if the public was aware of what they can retire on under the current legislation they would be really surprised.

There's no secret on doctors' pensions.  Currently if a GP or consultant retires at 60 they will get a pension of around £52k per annum and a lump sum of around £150k.  They have already agreed to defer their retirement until age 65.  The government now want to take this to 68 and anyone retiring at this age would get a pension of £68k.  It is estimated that to qualify for a pension of this order a private individual would need a pot of £1.3m to invest.
BryanP
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Re: Doctors Pensions

A private pension would have to be nearer £2.5 million to match the GP pension, the goverment will now tax a surplus fund above £1.5 million at a tax rate of 55% unless they take the surplus as income and they will only tax it at 25%, is this wahat they call equality?
Community Veteran
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Registered: 12-08-2007

Re: Doctors Pensions

My figure was given by an actuary on the radio this morning.  Wink
In the past doctors have been very good at pay/benefits negotiations and I would put my money on them to win this argument.  The last government certainly came away with egg on its face after they agreed the existing contract.
BryanP
Grafter
Posts: 138
Registered: 21-11-2011

Re: Doctors Pensions

Well there are actuaries and there are actuaries, depends which side of the fence they sit on. There is on the internet a number of calculators that will work out what a fund of £2.5 million will give you, I will echo your sentiments in your tag line, Public Service employees "need to wake up and smell the coffe"
Community Veteran
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Re: Doctors Pensions

Not all public service employers are good though. I worked for one years ago and they reckoned after another 37 years of service I'd get less than £500 a year.
If you ask me the doctors have got it very well made. We're all in this together remember.. except the rich who insist they've got it a harder life than the poor.
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Community Veteran
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Registered: 30-07-2007

Re: Doctors Pensions

Quote from: BryanP

My take on this is if the private section has been forced to up their retirement age from age  65 to (still climbing) and women being forced to increase their retiremnet age from 60 to 65 and then plus why can't the public sector follow suit, why are the public sector special?

Bryan
The retirement age is  excatly the same for the private and public sectors, what makes you think otherwise?
The discussion is about doctors, and in particular GPs.  A friend of mine is a GP and I agree that the issue of their pay and pensions is a bit complex, but complex in their favour.  Of course he gets paid by the NHS on the basis of his patient numbers (and the number of spaces in his car park!), but the practice is a business in itself, and therefore the partners can also take out profits from the business. The more services they offer, the higher their profits.  The last I heard was that an average GP could earn in the region of £150K p.a. and that was after the negotiation to change their contracts, so that they weren't obliged to work evenings and weekends, and if they did, they were paid extra. That's why the NHS is employing foreign doctors for weekend work who barely speak English (if they speak it at all)  It was only a year or so ago that I read that Germany has a shortage of GPs, because they can earn more flying to England on Friday afternoon, working the weekend, and then flying home on Monday morning!
Community Veteran
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Re: Doctors Pensions

Perhaps someone "in the know" could clarify what element of doctors remuneration is pensionable and how that relates to the Lifetime Allowance (£1.8m) now in place.
In particular I've heard doctors justifying £100K+ salaries on the basis that that figure included payments that were really operating costs of the surgery - buildings, admin, staff, communications etc etc. so their personal incomes are actually less.
Yet it sounds like those amounts are "pensionable" (ignoring for now where the money to build the fund comes from) which to me seems wrong.
That said, the pensions quoted for an ordinary GP would seem, to the average worker, to be many times more than the "average Joe" would earn while working!  Shocked
Community Veteran
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Registered: 12-08-2007

Re: Doctors Pensions

The Lifetime Allowance is £1.5m. 
The pensions quoted for a GP seem high but they pay a high % of salary into the scheme.  Their pension scheme is also in profit to around £2b.
The figures quoted are net of any running expenses for their practice.  Many of their staff are employed by the NHS and not the practice.
This argument they have with government also applies to hospital consultants who do not have any of the running costs mentioned earlier so this should clarify the situation somewhat.
alanf
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Re: Doctors Pensions

Quote from: HPsauce
Perhaps someone "in the know" could clarify what element of doctors remuneration is pensionable

See http://www.nhsbsa.nhs.uk/Documents/Pensions/0506-FAQ-AnnexA.doc

GPs with pensionable incomes of c £110,000 now pay nearly 11% in pension contributions.
Community Veteran
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Registered: 31-08-2007

Re: Doctors Pensions

I know when I was paying into a final salary pension scheme, my contributions were quite high and I knew a lot of people who also paid AVC's.
The Private sector has taken quite a few hits in recent years (one way and another) whereas the Public sector has been cushioned.
Doctors had a damned good deal out of the Government a few years ago (and GP's work less hours than they did). Dentists also had a damned good deal.
The Public sector want to wake up and smell the coffee to use that well worn expression. They're unlikely to get sympathy from me.
Community Veteran
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Registered: 02-02-2008

Re: Doctors Pensions

Quote from: alanf
GPs with pensionable incomes of c £110,000 now pay nearly 11% in pension contributions.

I think Anotherone has hit the nail on the head with "smell the coffee" etc.; that's a pitifully low contribution compared to the private sector for similar benefits and a negligible risk too!
I always paid the maximum (into pensions) that I could according to the tax rules and NEVER EVER paid as little as that for my whole working life; peaked at near 40% at times when I could afford it!
My job level, skills, responsibilities, education, training and pay were always comparable (in some respects higher, except pay) to a GP (I know plenty of them!) - until recent years when their pay rocketed.
My pension on the other hand is a pittance compared to theirs, which is why I have retired but still work (part time). Cry
Community Veteran
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Registered: 02-08-2007

Re: Doctors Pensions

It is a complex issue, as I understand it to become a doctor ( GP) you need a couple of degrees, one in medicine & one in anatomy and then spend a couple of years as a junior doctor in a hospital with additional training required if you want to specialise in a particular area.
So by the time you have done your training you start with a fair amount of debt as a result of your course at university and it will be a number of years before you are in any position to get a mortgage and support a family, unless of course you have rich parents.
Of course other people doing degrees will also be in debt but the point I am making here is that on average a person training to be a doctor will take much longer than the average person to get a return on the cost of his training.
It's also fair to say (in my opinion) that the average Doctor is of more value to you that all these so called experts in finance who have lost you a fortune on your savings, so I have no problem with Medical staff who are good at their job getting a good wage and pension but I can think of some groups of workers who are not worth one tenth of what they get paid let alone getting a pension at the end of it.