How to pension GP locum income

Pensioning income as a locum with NHS Pensions can be a bit more complex compared to permanent employees. Here's how locums can pension their income with NHS Pensions:

1. Join the NHS Pension Scheme: Locums who work for the NHS have the opportunity to join the NHS Pension Scheme. This scheme provides a defined benefit pension, which means that your pension is based on your career averaged earnings.
   
   
2. Determine your pensionable earnings: As a locum, your pensionable earnings may vary depending on your work arrangements. GP locum pensionable income is 90% of your fee, excluding the employer contribution element. You cannot pension any more or less than 90%.
   
   You’re 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, however, any work through Lantum is pensionable.
   
   
3. Contributions to the NHS Pension Scheme: Locums who join the NHS Pension Scheme are required to make regular contributions towards their pension. The contribution rates are based on your pensionable earnings. The rates are determined by the NHS Pension Scheme and may vary depending on your income band. It’s important to stay updated with the current contribution rates to make sure you’re making the correct payments.
   
   Your pension contribution tier is based on your anticipated annualised pensionable income. 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 hold a concurrent Type 1 (partner or sole proprietor) or Type 2 (salaried GP) post for the full pension scheme year, annualising will not apply to you.
   
   Type 1 and Type 2 practitioners get full cover during periods of pensionable employment but if you’re solely a GP locum, you’re only covered on days you actually work. Annualising can increase the cost of your membership but doesn’t impact the amount of benefits you will receive.
   
   
4. Submission of Locum A and B forms: To pension your locum income, you need to complete Locum A and B forms and submit these to PCSE (in England), alongside paying the employees and employers contributions to NHS England.
   
   Locum Form A declares the work you’ve done at a given practice. The first part of Form A is completed by the locum and details the sessions worked and the fees earned. You should submit a Locum Form A with every invoice to the practice. The practice then completes their part of the form, signing and stamping it to confirm to the pensions office that you have undertaken the pensionable work. They will return the form to you. Every month you need to send all of your Form As to PCSE with a Form B and your pension payments for that month.
   
   Locum Form B only needs to be completed once a month. It’s a summary of all the pensionable pay that you’ve received from practices in that month. It’s created based on the date the work was paid, rather than when the work was done. For example, if you work at a practice in August and get paid for this work in September, you’ll create a Locum Form B for the August work in the month of September. The form will help you work out the total employees and employers pension contributions due for the month.
   
   You must send your pension forms and contribution payments within 10 weeks of the date worked.
   
   Further guidance and the Locum forms can be found here.
   
   
5. Incorrectly assessed tier rate: GP locums in England can check their PCSE Employee Contribution Statements (which can be found on their PCSE online account) at the end of the scheme year to make sure that all income has been properly recognised. You should then use the NHS Pensions Annualising calculator to check that your pension contribution tier is correct.
   
   If you have underestimated your tier during the year, you need to make sure that you amend this during the year, and any additional corrections can be made at the end of the year – further guidance can be found here.
   
   If you have overpaid, at the end of the year you’ll need to claim the monies back from PCSE.
   
   
6. Keep track of your Pension Benefits: Locums should regularly review their NHS Pension benefits to ensure accuracy and keep track of their retirement income. The NHS Pensions website provides access to the Total Reward Statement, which displays pensionable earnings and estimated pension benefits. It’s important to review this information periodically and notify NHS Pensions of any changes or discrepancies.

Need help?

To discuss any of the above, please get in touch with our specialist medical accounting team. Call 0330 024 0888 or email enquiry@larking-gowen.co.uk.

Jamie Butcher