London Daily

Focus on the big picture.
Saturday, Sep 26, 2026

Budget 2023: Pensions tax cut for all is wrong, Labour leader says

Budget 2023: Pensions tax cut for all is wrong, Labour leader says

Pension tax breaks aimed at keeping doctors in work should not have been given to all, Sir Keir Starmer has said.

It comes after Chancellor Jeremy Hunt scrapped the overall £1m lifetime limit on tax-free pensions savings in Wednesday's Budget.

The Labour leader branded the move a tax break for "the richest 1%" that showed the "wrong priorities".

He added that any pensions tweak should be "tailor-made" for doctors.

Doctors have said the current tax-free pension allowances are pushing some of them into declining overtime shifts or into early retirement.

Mr Hunt, a former health secretary, says the changes to the pension pot rules are a "very important measure to get the NHS working".

At the Budget, he announced he was abolishing the current £1.07m cap on how much individuals can build up in their private pension pots over their career without having to pay additional tax.

The annual tax-free allowance on pensions will also increase from £40,000 to £60,000.

The chancellor said the changes would stop doctors retiring early - but would also contribute to the government's wider drive to persuade retirees back into work.

"I have realised the issue goes wider than doctors. No one should be pushed out of the workforce for tax reasons," he told MPs.

The financial watchdog, the Office for Budget Responsibility, estimated the changes to the allowance would increase overall employment by 15,000 workers.

The combined cost will be more than £1.1bn a year by 2027/8, according to official estimates.


'Billion pound giveaway'


However, the decision to opt for a wider change to pension rules has been criticised by Labour, which branded it a "one billion pound pensions bung" for the wealthy.

The party has committed to overturning the government's changes if it wins power at the next general election, and replacing it with an alternative scheme just for doctors.

It has not yet offered details of its alternative approach, but has suggested it could be based on a scheme for judges introduced in 2022, under which the tax allowances are disapplied.

Shadow health secretary Wes Streeting has previously told the Telegraph in September he favoured "doing away with" the savings cap.

Speaking earlier, Mr Hunt said it suggested Mr Streeting had previously advocated the government's approach.

But Mr Streeting insisted his previous comments were about how the allowance affected doctors - and he had "consistently argued" they should have their own carve-out from the rules.

He told BBC News this would cost "a fraction" of the blanket change proposed by ministers, which he called "a sledgehammer to crack a nut".

Mr Hunt defended making a rule change across the board, arguing it was the "simplest and quickest way" to resolve the issues facing doctors.

He added that the change could be introduced in two weeks, delivering help to the NHS when it "most needs support".

He pointed to Royal College of Surgeons statistics, saying the organisation had found that 69% of their members had reduced their hours because of the "way pension taxes work".

On Wednesday, Treasury Minister John Glen said a targeted scheme risked legal challenges from other highly-paid public sector workers, such as senior civil servants.

Speaking to BBC2's Politics Live, he added that a wider change to the rules would also have a "positive effect on the economy as a whole".

The announcement was welcomed by NHS Providers, which represents hospitals in England.


'Poor value'


Chief executive Sir Julian Hartley said it would help "stem the flow of senior NHS staff either taking early retirement or not taking on extra work for fear of punitive tax bills".

But the independent Institute for Fiscal Studies said the change would "encourage a relatively small number of better-off workers to stay in the workforce a bit longer" and was "unlikely to have a big effect on overall employment".

The Resolution Foundation think tank, which focuses on people on low to middle incomes, described the policy as "hugely regressive and wasteful".

Chief executive Torsten Bell said: "It's a big victory for NHS consultants but poor value for money for Britain."

Newsletter

Related Articles

0:00
0:00
Close
Royal Navy Diving Squadron Honoured for Global Bomb Disposal Efforts
UK State Pension Set to Approach £13,000 Per Year Under Triple-Lock
Rolls-Royce Wins Multi-Million-Pound Engine Contract with Philippine Airlines
TfL Questions Future of Heathrow Express Amid Proposed £33 Billion Expansion
Ed Miliband Warns Iran Against Hostile Operations on British Soil
S&P Global Manufacturing Index Signals Stabilization Amid Rising Fuel Costs
Prime Minister Andy Burnham Launches National Centre for Information Defence
UK Food and Drink Trade Deficit Surges to £21.1 Billion
OECD Upgrades United Kingdom Economic Growth Forecast to 1.1 Percent
Bank of England Faces Policy Challenges as Energy Prices Push Inflation Projections Higher
IMF Urges UK and Major Economies to Reduce Public Borrowing and Debt
UK Government Concedes Chagos Islands Sovereignty Deal is Dead Following Trump Opposition
Prosecutors Seek More Than 10 Years in Prison for Former DUP Leader Jeffrey Donaldson
UK Provided £66 Million in Emergency Security Funding for Mosques After Southport Disorder
Manston Inquiry Examines Role of Government Decisions in 2022 Overcrowding Crisis
Justice System Capacity Pressures Raise Concerns Over Release of Sex Offenders
UK Food and Drink Trade Deficit Widens to Record £21.1 Billion
UK Releases Climate Security Findings Previously Withheld Under Starmer
TalkTalk Races to Sell Consumer and Broadband Businesses as Administration Threat Looms
NHS Bodies Impose Minimum Two-Year Waits for ADHD and Autism Assessments
Andy Burnham Pledges £210 Million to Revive Boarded-Up High Streets
UK Borrowing Reaches £18.3 Billion in August Ahead of Autumn Budget
Vistry Cuts Profit Outlook as Losses Deepen and Private Home Sales Weaken
Reported Assaults on Great Britain’s Railways Rise Sharply
Far-Right Activist Daniel Thomas Arrested After Channel Dinghy Slashing
Ukrainians in Britain Face Greater Homelessness Risk as Host Payments Are Cut
Scottish Drug Deaths Rise as Synthetic Opioids Spread
UK Diesel Prices Approach Record High as Energy Costs Intensify
UK Food and Drink Trade Deficit Widens to Record £21 Billion
Britain’s Largest Planned AI Supercomputer Delayed by Power Grid Constraints
NHS Boards Impose Minimum Waits of Up to Two Years for ADHD and Autism Assessments
Police Arrest Far-Right Activist After Migrant Dinghy Slashed in English Channel
Synthetic Opioids Drive Renewed Rise in Scotland’s Drug Deaths
Reported Assaults on Britain’s Railways Rise 20% in a Year
Vistry Cuts Profit Forecast as Losses Weigh on UK Housebuilder
TikTok Drops Appeal and Accepts £12.7 Million UK Data Protection Fine
Russell Group Urges UK Government to Drop Proposed International Student Levy
Legal & General Plans to Cut 1,000 Jobs by Mid-2027
UK Health Bill Would Remove Independent Governors From NHS Foundation Trusts
BMA Raises Patient Safety Concerns Over Advanced Practitioners Filling Doctor Rotas
UK’s Largest AI Supercomputer Delayed by Power Supply Constraints
NHS Orders Security Cameras in Neonatal Units Following Thirlwall Inquiry
Post-Brexit Trade Barriers Cost UK Economy Up to £6.5 Billion a Year, Analysis Says
UK Parliament Launches Inquiry Into Bank of England Monetary Policy Independence
Global Bond Selloff and Higher Oil Prices Narrow UK Budget Options
UK Prime Minister Andy Burnham Addresses UN and Holds First Meeting With Donald Trump
Royal Navy Commandos Complete Maritime Operations Training With US Navy SEALs
Vistry Profit Warning Adds to Concerns Over UK Housebuilding Conditions
UK Commits £343 Million to Major Expansion of Community Mental Health Services
Five Eyes Partners Back UK-Led Campaign Against Global Fraud Networks
×