London Daily

Focus on the big picture.
Saturday, Dec 13, 2025

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
Ex-ICC Prosecutor Alleges UK Threatened to Withdraw Funding Over Netanyahu Arrest Warrant Bid
UK Disciplinary Tribunal Clears Carter-Ruck Lawyer of Misconduct in OneCoin Case
‘Pink Ladies’ Emerge as Prominent Face of UK Anti-Immigration Protests
Nigel Farage Says Reform UK Has Become Britain’s Largest Party as Labour Membership Falls Sharply
Google DeepMind and UK Government Launch First Automated AI Lab to Accelerate Scientific Discovery
UK Economy Falters Ahead of Budget as Growth Contracts and Confidence Wanes
Australia Approves Increased Foreign Stake in Strategic Defence Shipbuilder
Former UK Prime Minister Boris Johnson proclaims, “For Ukraine, surrendering their land would be a nightmare.”
Microsoft Challenges £2.1 Billion UK Cloud Licensing Lawsuit at Competition Tribunal
Fake Doctor in Uttar Pradesh Accused of Killing Woman After Performing YouTube-Based Surgery
Hackers Are Hiding Malware in Open-Source Tools and IDE Extensions
Traveling to USA? Homeland Security moving toward requiring foreign travelers to share social media history
UK Officials Push Back at Trump Saying European Leaders ‘Talk Too Much’ About Ukraine
UK Warns of Escalating Cyber Assault Linked to Putin’s State-Backed Operations
UK Consumer Spending Falters in November as Households Hold Back Ahead of Budget
UK Orders Fresh Review of Prince Harry’s Security Status After Formal Request
U.S. Authorises Nvidia to Sell H200 AI Chips to China Under Security Controls
Trump in Direct Assault: European Leaders Are Weak, Immigration a Disaster. Russia Is Strong and Big — and Will Win
"App recommendation" or disguised advertisement? ChatGPT Premium users are furious
"The Great Filtering": Australia Blocks Hundreds of Thousands of Minors From Social Networks
Mark Zuckerberg Pulls Back From Metaverse After $70 Billion Loss as Meta Shifts Priorities to AI
Nvidia CEO Says U.S. Data-Center Builds Take Years while China ‘Builds a Hospital in a Weekend’
Indian Airports in Turmoil as IndiGo Cancels Over a Thousand Flights, Stranding Thousands
Hollywood Industry on Edge as Netflix Secures Near-$60 Bln Loan for Warner Bros Takeover
Drugs and Assassinations: The Connection Between the Italian Mafia and Football Ultras
Hollywood megadeal: Netflix acquires Warner Bros. Discovery for 83 billion dollars
The Disregard for a Europe ‘in Danger of Erasure,’ the Shift Toward Russia: Trump’s Strategic Policy Document
Two and a Half Weeks After the Major Outage: A Cloudflare Malfunction Brings Down Multiple Sites
UK data-regulator demands urgent clarity on racial bias in police facial-recognition systems
Labour Uses Biscuits to Explain UK Debt — MPs Lean Into Social Media to Reach New Audiences
German President Lays Wreath at Coventry as UK-Germany Reaffirm Unity Against Russia’s Threat
UK Inquiry Finds Putin ‘Morally Responsible’ for 2018 Novichok Death — London Imposes Broad Sanctions on GRU
India backs down on plan to mandate government “Sanchar Saathi” app on all smartphones
King Charles Welcomes German President Steinmeier to UK in First State Visit by Berlin in 27 Years
UK Plans Major Cutback to Jury Trials as Crown Court Backlog Nears 80,000
UK Government to Significantly Limit Jury Trials in England and Wales
U.S. and U.K. Seal Drug-Pricing Deal: Britain Agrees to Pay More, U.S. Lifts Tariffs
UK Postpones Decision Yet Again on China’s Proposed Mega-Embassy in London
Head of UK Budget Watchdog Resigns After Premature Leak of Reeves’ Budget Report
Car-sharing giant Zipcar to exit UK market by end of 2025
Reports of Widespread Drone Deployment Raise Privacy and Security Questions in the UK
UK Signals Security Concerns Over China While Pursuing Stronger Trade Links
Google warns of AI “irrationality” just as Gemini 3 launch rattles markets
Top Consultancies Freeze Starting Salaries as AI Threatens ‘Pyramid’ Model
Macron Says Washington Pressuring EU to Delay Enforcement of Digital-Regulation Probes Against Meta, TikTok and X
UK’s DragonFire Laser Downs High-Speed Drones as £316m Deal Speeds Naval Deployment
UK Chancellor Rejects Claims She Misled Public on Fiscal Outlook Ahead of Budget
Starmer Defends Autumn Budget as Finance Chief Faces Accusations of Misleading Public Finances
EU Firms Struggle with 3,000-Hour Paperwork Load — While Automakers Fear De Facto 2030 Petrol Car Ban
White House launches ‘Hall of Shame’ site to publicly condemn media outlets for alleged bias
×