One of the biggest talking points with higher earning clients working in the NHS has been the Government’s tax charges on pensions.

The NHS Pension Scheme has undergone quite drastic changes in recent times.

The annual cap on how much pension pots can increase by, tax-free, has been set at £40,000 since 2016.

GPs and consultants are therefore hit with tax if they attempt to grow their pension savings by more than this in one year.

Alongside this, the Government brought in new rules regarding the amount of tax-free pension benefits that can be built up over a lifetime – cutting the limit from £1.25million to £1million.

Then there were changes to the amount of tax relief on pension benefits that the highest earners could gain. It means the tax-free limit was cut to as low as £10,000 for those earning the most.

The upshot of the changes was a growing number of the highest earning medics saw no reason to carry on working until retirement age, while others opted to reduce their clinical hours to avoid the pension charges.

It seems that the Government has listened and is proposing new reforms aimed at trying to stem the tide of retiring GPs.

The thrust of the reforms focus on allowing NHS employees the chance to build their pension pots more gradually, thereby avoiding charges.

Currently, there is no flexibility with the highest earners required to pay 14.5 per cent of salary.

The immediate reaction from GPs has been somewhat underwhelming with one GP saying: “You will take a bit more home at the end of each month by avoiding tax bills – but your pension is halved. That doesn’t seem very generous or like a way of encouraging me to work harder.”

Since our last newsletter in March, various Brexit deadlines have come and gone as, indeed, has a Tory leader.

So, we now find ourselves with the double whammy of continued uncertainty regarding our future relationship with the European Union – and no idea who the next Tory leader (and Prime Minister) will be.

Boris Johnson is considered by many to be the front runner but, as history shows, the favourite for the Conservative Party crown has a habit of tripping up at the final hurdle.

Our clients tend to reflect the country at large – many voted in favour of leaving the EU while just as many were adamant that our future economic prosperity was best served by staying within the EU family of nations.

A few were even content for us to leave the EU without a deal – something that has become a major talking point during the recent Tory leadership hustings.

Despite these uncertain times, the UK economy and financial markets have held up resiliently. And even when the pound goes down, there is usually a positive for overseas holdings.

I held a review with one client last week, who had come to the end of his first year with us. He had enjoyed an 8 per cent return.

People are often surprised when I tell them that major news events such as Brexit and the wider political uncertainty have had little or no impact on their portfolios.

My answer is always the same. Our job as your financial advisor is to ensure that your portfolio is suitably diverse and part of a clearly defined strategy. Inevitably, there will be economic jolts along the way but a properly robust and varied plan, should ensure strong performance over the longer term.