An introduction to the NHS pension scheme for locum GPs

Your pension can be hard to navigate as a locum GP. Here we guide you on how to pension locum earnings, opting out of the NHS scheme and how your benefits are calculated.

Location: UK
Audience: GPs
Last reviewed: 29 October 2021
Piggybank illustration

This guide addresses common questions asked by locum GPs including how to pension locum earnings, opting out of the NHS scheme and how benefits are calculated.

Remember that this is general guidance and for specific information, you should contact BMA pensions.

 

Eligibility to join the NHS pension scheme as a locum GP

You are able to contribute into the NHS pension scheme for any GP locum work if:

  • you are on the medical performers list
  • you undertake the locum work directly for an NHS GMS, PMS, APMS practice or appraisal work for NHSE or a health board (the appraisal and locum work does not need to be concurrent). 
What is the definition of a locum?

A locum is defined as someone who:

  • deputises or assists temporarily in the provision of essential services
  • additional services
  • enhanced services
  • dispensing services
  • OOH services
  • commissioned services
  • certification services
  • collaborative services
  • or any combination thereof.
Can I pension locum work as a GP?

England and Wales

Locum GPs in England and Wales are able to decide whether to pension locum work whilst still contributing to the NHS pension scheme for other GP and officer work.

Locum GP work is treated independently of other GP work and the decision to pension is effected by the completion of locum forms A and B.

Scotland and Northern Ireland

In Scotland and Northern Ireland, locum GP work must be pensioned if other GP work is being pensioned.

How does working long-term as a locum GP affect my pension?

England and Wales

You can choose whether to be classed as a locum or salaried GP for pension purposes when working long term in one practice.

Scotland and Northern Ireland

If you have worked as a locum at a practice for more than six months, you may be able to choose to be pensioned as a salaried GP for pension purposes. This will not alter your status as self-employed.

‘Temporarily’ working is defined as six months, regardless of the hours you work. Working for longer in the same practice is treated as assistant practitioner work and collecting of contributions lies with the practice.

In Scotland, practices could make a case to the health board for a longer period if they face a difficulty in recruiting an assistant practitioner for the longer term.

You can also take a break of one month to ‘reset the clock’.

Is there benefit to pensioning as a salaried GP?

A benefit of pensioning as per the salaried GP method (for long term locums working in one practice) is that 100% of income is pensionable (as opposed to 90%).

You are considered to be in the scheme for the duration that you are treated as such (and not just on days worked) for the purposes of death benefits and ill health retirement applications.

This also means that the impact of annualising is reduced as you are considered to be in the scheme each day you are treated as a salaried GP and not just on days worked. Annualisation determines your contribution tier based on income that could have been earned had you worked 365 days.

Paying your contributions

Read more about your pension tier, annualisation and submitting the right forms to PCSE (for GPs working in England) in our guidance for sessional GPs

How much do I pay?

If you are in the 2015 scheme in England, Wales and Northern Ireland, your contribution is based on your anticipated annualised NHS GP earnings.

Annualised income is your total GP pensionable earnings (earned during the scheme year from 1 April to 31 March) divided by the number of days of pensionable service and multiplied by 365. 

If you are a member of the 1995 or 2008 sections, your contributions are based on your anticipated actual GP pensionable earnings.

There is a tiered contribution structure for all members. The percentage contribution required to be paid into the scheme will depend on what level of income you earn (annualised income where applicable).

You will need to pay the appropriate percentage against 90% of your gross locum earnings. 10% is considered to represent expenses, which are not pensionable in the NHS pension scheme. 

What about the McCloud remedy?

Because of the McCloud remedy on age discrimination, we expect any members who contributed more as a result of annualising in the 2015 scheme, to be able to claim a reimbursement of overpaid contributions in their legacy scheme.

What time period counts towards the pension paid?

Your pension will be credited against the month the work was undertaken rather than when the monies were paid.

However, it is not unusual to find that work undertaken at the end of the scheme year in March can be credited at the beginning of the scheme year in April and this can result in discrepancies in your records.

What if I have other work or additional pension?

If you undertake other GP pensionable work as well as your locum work, your contribution tier will be based on your total anticipated GP earnings (annualised income where applicable). GP benefits on retirement are based on total career earnings.

If you have previously contracted to purchase added years or additional pension then you will also need to pay these contributions.

I have incorrectly assessed my tier

If you have underestimated your tier during the year, you need to ensure that you amend this during the year and any additional corrections can be made at the end of the year..

If you overpay, at the end of the year you will need to claim it back, either from your provider or from the primary care administrator, depending on the role held when the overpayment occurred.

Locum overpayments are reimbursed directly from the primary care administrator (PCSE in England).

Employer contributions

Who pays my employer contribution?

England and Wales

  • Your employer pension contribution is paid by the practice to you.
  • You need to forward this amount (currently limited to 14.38% of the 90% pensionable amount), plus your own contribution, to PCSE (local health board in Wales) via forms A and B.
  • Although the employer contribution has increased to 20.68%, you need to continue to request only 14.38% from any employer as the remainder will be made up by the Treasury directly.

Scotland and Northern Ireland

  • Your employer contribution is paid by your primary care organisation as long as you continue to satisfy the relevant scheme conditions for being a locum.
  • The employer contribution is 20.9% in Scotland and 22.5% in Northern Ireland.

Pensionable work

Are there any restrictions on being able to pension GP locum work?

You are only able to pension NHS earnings received directly from a practice. Locum work undertaken via a locum agency or deputising firm cannot be pensioned in the NHS pension scheme.

Additionally, you are not able to pension locum work that was carried out more than ten weeks ago. 

It is important that you complete the A and B forms in a timely fashion and return them, with your contribution, to your host PCO or PCSE. This should be no later than the seventh of the month following the month that the pay you are pensioning was received in. 

For example, payments received in July must be pensioned by 7 August. Form B relates to payments received in the month, rather than work undertaken in the month. 

In order to be able to pension all earnings it is important that you receive payments from the practices you have worked at within 10 weeks of undertaking the work.

This 10 week rule has been suspended (in 2020/21 and 2021/22) because of the COVID-19 pandemic, but will be restored thereafter.

I have worked for six months at a practice

You can locum there again once you have had a one month break.

In England and Wales, you can continue beyond six months and decide whether you wish to pension via locum forms A and B or to be treated as though you are a salaried GP (in pension terms only).  

In Scotland and Northern Ireland, you will be pensioned as a salaried GP if you work beyond six months in the same practice without a month break.

I am a GP partner and locum

You are able to pension locum earnings via forms A and B so long as it is not in respect of locum work undertaken in your own practice.

Locum work at your own practice is pensionable in the same way as your main practitioner earnings and should be detailed on your end of year certificate.

Locum work at other practices should be pensioned via the completion of locum forms A and B, detailed above.

I am a salaried GP

You are able to pension locum earnings, even for locum work undertaken at your own practice. 

This income should be pensioned via the completion of locum forms A and B, detailed above.

It is also possible to undertake pensionable overtime at your own practice which will be pensioned in the same way as your main salaried GP income.

I am a locum GP and an appraiser

Locum GPs who conduct appraisals are able to pension any income earned from doing so, via forms A and B. You can choose whether or not you want to do so. 

I have set up a limited company

It will not be possible for you to pension your earnings in the NHS pension scheme if you have processed your earnings through a limited company.

Maternity and other absence

If you work exclusively as a locum, you are only able to contribute into the scheme during periods when you are actually working. 

You are not able to make up contributions that you would otherwise have made had you not been on maternity, sickness or any other absence.

Opting out

You can opt out of NHS pension scheme membership and not pension your GP earnings should you wish. As this may a have detrimental impact on your final pension benefits you should discuss this with an independent financial adviser.

If you are working exclusively as a GP locum, you can simply stop pensioning your GP locum earnings by not completing forms A and B.

England and Wales

If you are working as a GP locum concurrently with other GP work either as a principal or assistant GP, then you may choose whether:

  • to opt out of pensioning your type 1 and 2 work by completing an opt out form or
  • opting out of your locum work (by not completing forms A and B) or
  • both.
Scotland and NI

If you are working as a GP locum concurrently with other GP work, either as a principal or assistant, then you will have to opt out of pensioning all GP work.

It is not possible for you to opt out of pensioning your locum work whilst still contributing as a type 1 or type 2 practitioner.

Calculating your pension

Your benefits at retirement will be based on your total career earnings.

I am in the 1995 section

If you are a member of the 1995 section, your total earnings will be multiplied by an accrual factor of 1.4%, after the income has been brought up to date with current earnings by a mechanism known as dynamising. 

Your pension keeps up with inflation by being based on current rates of pay/recently dynamised income. Dynamised income is increased in line with pensions increases plus 1.5%. This means that if CPI (consumer price inflation) growth is nil or negative the dynamising factor applied to increase GP income will be 1.5%.

I'm in the 2008 section

If you are a member of the 2008 section of the NHS pension scheme, your total earnings will be multiplied by an accrual factor of 1.87%, after the income has been brought up to date with current earnings by dynamising. 

Your pension keeps up with inflation by being based on current rates of pay/recently dynamised income. Dynamised income is increased in line with pensions increases plus 1.5%. This means that if CPI (consumer price inflation) growth is nil or negative the dynamising factor applied to increase GP income will be 1.5%.

I'm in the 2015 scheme

If you are a member of the 2015 scheme, 1/54th of each year’s earnings goes towards your pension and is revalued by the consumer prices index plus 1.5%.

If you transitioned to the 2015 scheme from the 1995 or 2008 section

If you have transitioned to the 2015 scheme and have benefits in the 1995/2008 sections, these will retain 'final salary' linking (continue to be increased in line with the consumer prices index plus 1.5%).

This is as long as you do not have a break in pensionable service of five years or more. If you have a break in pensionable service of five years or more, your previous GP benefits will be increased in line with the consumer prices index only.

The McCloud remedy will mean that members in scope will be restored to their legacy section for the remedy period (1 April 2015 to 31 March 2022). From 1 April 2022 all members, irrespective of age, will be required to join the 2015 scheme.

Ill health retirement and death in service

To qualify for consideration for ill health retirement as an active member of the scheme you will need to make your ill health application whilst actively contributing to the scheme. Outside of this, your application will be treated as for a deferred member.

Death in service

If you work exclusively as a locum GP, you will only be covered for death in service benefits if you are in active pensionable employment on the day of death.

Even where death in service is not payable, the NHS pension scheme provides for another type of cover.

Instead, you would be covered by the death in deferment rules applicable to those who are not in active pensionable service at the time of death.