U.K. Tries to Tempt Health Workers Back With Pension Pot Change

(Bloomberg) -- The U.K. government will increase the amount most people can earn before incurring a tax liability on their pension contributions as it seeks to boost the number of workers in the health service.

Chancellor of the Exchequer Rishi Sunak has been under pressure to adjust the earnings thresholds, which have been blamed for causing family doctors and hospital consultants to leave their jobs. Those workers faced potentially paying more tax than they earn as the value of their pension pots rose.

In Wednesday’s budget, Sunak said workers will now be able to earn 200,000 pounds ($259,000) before cuts could kick in to the amount they can pay into their retirement fund without incurring a tax liability. Previously, it was 110,000 pounds.

To help pay for the measure, some top earners will see the minimum amount they can contribute before the tax kicks in fall to 4,000 pounds. The government estimates the change will cost it 180 million pounds in the next fiscal year and 670 million pounds in the 2024 to 2025 fiscal year.

To contact the reporter on this story: Neil Callanan in London at ncallanan@bloomberg.net

To contact the editors responsible for this story: David Merritt at dmerritt1@bloomberg.net, Chris Bourke, Patrick Henry

©2020 Bloomberg L.P.