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 advice and for tailored pensions advice, 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.
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 or collaborative services (or any combination thereof).
You can choose whether to pension your income via the means of completing locum forms A and B or by being treated as a salaried GP in pension terms.
A benefit of pensioning as per the salaried GP method is that 100% of income is pensionable (as opposed to 90%) and 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.
In Scotland and Northern Ireland, ‘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’.
How much you need to pay in
- Your contribution to the scheme is based on your anticipated annualised NHS GP earnings if you are a member of the 2015 scheme.
- Annualised income is your total GP pensionable earnings (earned 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 earning, this is tiered so will depend on what level of income you earn.
- This will be against 90% of your gross locum earnings (10% is considered to represent expenses, which are not pensionable).
- 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), as 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.
Your employer contributions
England and Wales
- Your employer pension contribution is paid by the practice.
- You need to forward this amount (based on 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.
- The employer contribution is 22.5%.
- Forms for locums working in Scotland.
- Forms for locums working in Northern Ireland.
Restrictions on pensioning your work
- Locum work undertaken via a locum agency or deputising firm cannot be pensioned in the NHS pension scheme.
- You are not able to pension locum work that was carried out more than ten weeks ago. During the COVID pandemic this time limit has been suspended but will be reinstated with six months’ notice in due course.
- You must return forms A and B and your contribution to your host PCO no later than the seventh of the month following the month that the pay was earned, eg payments received in July must be pensioned by 7 August.
Opting out of the NHS pension scheme
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 such a step 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 work 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 by not completing forms A and B.
Scotland and Northern Ireland
If you are working as a GP locum concurrently with other work as a principal or assistant GP, then you will have to opt-out of pensioning all GP work.
How will my pension be calculated at retirement?
Your benefits at retirement will be based on your total career earnings.
If you are a member of the 1995 section of the NHS pension scheme 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.
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 a mechanism known as dynamising.
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 have transitioned to the 2015 scheme and have benefits in the 1995/2008 sections these will retain ‘final salary’ linking (i.e. continue to be increased in line with the consumer prices index plus 1.5%) for so 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 then your previous GP benefits will be increased in line with the consumer prices index only.
I am a GP partner
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. Locuming at your own practice is pensionable in the same way as your main practitioner earnings and such income should be detailed on your end of year certificate.
I am a salaried GP
You are able to pension locum earnings, even for locum work undertaken at your own practice.
Maternity, absence and death in service
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.
If you work exclusively as a GP locum, you will only be covered for death in service benefits if you die whilst contributing to the scheme.
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.