What to do when you hit the pensions cap

High earners running up against pension caps should do their sums, says David Prosser.

946_MW_P23_Pensions

The BMA fears experienced staff couldleave if pension rulings aren't changed
(Image credit: Credit: Adrian Sherratt / Alamy Stock Photo)

Should you give up work to avoid a nasty tax bill? This, apparently, is the dilemma now facing doctors in danger of reaching caps on pension-contribution limits. The generosity of the defined-benefit (DB) NHS pension scheme means many are incurring extra tax charges, either as they near retirement, or when they take on overtime and extra work. The British Medical Association (BMA)thinks the problem is so acute we need to change the rules in order to avoid losing crucial frontline staff from the NHS.

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David Prosser
Business Columnist

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.