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Doctors are being financially punished for working overtime

With more medical staff turning down extra shifts, NHS waiting lists are growing.

How much would someone have to pay you to work an extra day a week? If you’re currently working full-time, consider yourself well-paid, and enjoy having free time to do whatever you want, the answer is probably “a lot”. So you can probably understand why the NHS offering some staff overtime shifts that pay them less than usual and take money out of their pensions hasn’t gone down well. In fact, so many doctors are currently refusing to do extra work that it’s pushed patient waiting lists up by 50 percent in some parts of the UK.

The rubbish pay situation isn’t because of the NHS itself but because of some complicated pensions rules. Ready for some thrilling pension-pot talk? Let’s go. Basically, the government wants to encourage Brits to squirrel more of their money away so they can retire more comfortably (the State Pension is about £7k a year, half of what you’d make at a full-time minimum wage job). And one of the ways they do this is by not charging tax on any retirement savings. As most workers in the UK currently give the government 20-45 percent of their salary as income tax, that’s a pretty good deal.

But if there were no restrictions to how much pension money you could save tax-free, rich people (particularly those close to retirement age) would have an incentive to put loads of their spare cash into retirement saving accounts. The government would then have less tax money to spend on things like schools and hospitals. So to stop that, it sets limits on how much money you can put aside tax-free. If you earn less than £40k, you can only put in as much as you make each year (so you can’t, say, sell your house and put those savings in). The limit is then £40k until you earn over £150k, at which point your tax-free allowance goes down and down until you hit £210k, where you get no tax relief whatsoever.

Got it? Good. Back to the NHS overtime problem. Highly-paid specialists like heart surgeons are finding that working more is upping their income so much that it’s landing them with big tax bills and making it more expensive to fill up their pension pots. Many are concluding it’s not worth it, especially considering overtime also means sacrificing their weekends and time with their loved ones.

The NHS could solve this by paying these specialists significantly more money (£900 a shift has been mooted). But many people would have a problem with this considering that (a) the NHS is currently struggling to fund services to poor and vulnerable people and (b) it's generally considered right that high earners are taxed more. At the same time, longer waiting times mean more patients remaining in pain and risking worsening symptoms. As with many things in economics, there is no easy answer.

Read our explainer on: what motivates us to work.

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