The acclaimed neurosurgeon Mr Henry Marsh has recently published his second book Admissions: Life in Brain Surgery. I am sure the book will become a bestseller like his excellent forerunner Do No Harm.
In the current volume, Henry depicts his dream of finding not dignity in dying but ‘dignity in retirement’. The book opens with his impending departure from the NHS and the quest for a new life that will provide him with the intensity of his surgical career. He describes a ‘desperate search’ for a retirement project which we later learn is a derelict cottage in Oxford.
Henry is not alone in his desire to live a fulfilling fruits-of-your-labour retirement. Time and again our clients discuss their hopes and aspirations for life after medicine. Many of them report being even busier once away from the demands of the NHS – perhaps enjoying reduced-hours private practice or medico-legal work but also a plethora of recreational pursuits and a very full social diary. Indeed, one of the most enjoyable parts of our work is hearing about the fascinating non-medical pastimes, whether leisurely endeavours or full-throttle escapism.
Of course, to have the option of a full life when clinical practice ends, you must first make credible and realistic plans that will ensure you meet your financial objectives and secure your future lifestyle.
We are often asked ‘how much is enough?’ How much will secure a contented retirement? The challenge is that the goalposts are always changing. Every new piece of legislation, every change to the NHS pension scheme, every about-turn on tax relief can make it difficult to calculate if you are still on the right path.
The new £1million lifetime pensions savings limit is one such obstacle which makes long-term planning challenging. Senior doctors are discouraged from boosting their retirement fund beyond the lifetime allowance because doing so will attract harsh tax penalties of up to 55 per cent on excess savings.
We have already seen the impact of this – clients considering retiring earlier than anticipated because the goalposts have moved too far to fully commit to the NHS. At a time when the ageing population will require more healthcare, senior staff are effectively being ‘encouraged’ to leave the profession by what has been described as a ‘stealth tax on success’.
This measure will influence the choice of doctors who might otherwise prefer to work in the NHS full time, imparting their vast knowledge to a younger generation already facing challenges in their careers and enjoying the respect earned from a long and distinguished career.
The £1million figure may sound like a considerable sum but many middle-earning medical personnel will be hit by the new measure simply because of the way the threshold is assessed for defined-benefit pension schemes.
The calculations are complex and the continual reduction in the lifetime allowance figure, which stood at £1.8million in 2011, means early retirement planning is now essential rather than something to be considered a few months before your 60th birthday.
If you too are searching for ‘dignity in retirement’, now could be an ideal time to make some changes.
For specialist retirement planning advice, please contact us on 020 7636 7006.