Changes to the pension rules could ease the pressure on senior recruitment in local government, senior sector figures have suggested.
Chancellor Jeremy Hunt used last week’s Budget to unveil changes to the pension rules that will lift the annual limit on tax-free contributions from £40,000 to £60,000 and abolish the lifetime cap.
The move was aimed at attracting high salaried older staff back to work – particularly doctors – with Organisation for Economic Co-operation and Development figures showing the UK has the 23rd highest inactivity rate for over 55s.
Local government experts believe the move will encourage senior local government staff to stay amid a sector recruitment crisis.
Managing director of senior officers’ group Solace, Graeme McDonald, said: ‘Whatever the solution is around doctors, it needs to apply to local government staff.’
He claimed several council chiefs have already cited pension tax rules as a reason for stepping down, often to take on roles in the thriving interim market.
Director of recruitment firm Tile Hill, David Weir, added: ‘Raising the headroom will stop some people thinking about leaving.’
However, the Labour Party has already said it would reverse the policy if it was to win the next election, with an exemption for doctors to resolve specific issues in the NHS.
President of the Public Services People Managers’ Association, Gordon McFarlane, said: ‘It’s clear that while it’s in place it will benefit not just senior managers in local government, but also many senior long-serving senior professionals.
‘Should Labour win the next General Election and seek to reverse the decision then local government could see many senior people leaving, thus creating a sudden skills and knowledge gap.’
Pandemic’s effects mount as recruitment woes continue
This article was originally published by The MJ (£).
