Do you understand the benefits and true value of the NHS superannuation scheme for locum GPs?
Even if I had to pay the 14.5% employer's contribution personally, I would join the scheme in an instant. In fact, I have threatened some GPs with being sectioned under the mental health act for not being members of the scheme, which I think is a sign of how good it is, irrespective of any changes and tax charges.
There is a potential issue with regards to locums and paying the correct tiered contributions, and once the superannuable income is reconciled at the end of the year, you can be asked for extra payments.
I've also heard that some practices are refusing to pay the employers contribution, even though it is a legal requirement. Of course, if the locum is not actually within the scheme, or they are already in receipt of their NHS pension, then that is different.
I also know that some locums have set up limited companies to stay out of the scheme, as they've been 'advised' that it's better way of getting more income. The simple point here is that the limited company would not be an "admitted employer" under the terms of the NHS superannuation scheme, so can’t be in the scheme. So if a GP needs the money to live on, then having a limited company is of minimal benefit! You can use limited companies to avoid the employee’s contributions, but the downside is a lower pension on retirement.
What I tend to suggest is that once you believe that you have accumulated enough pension to provide a comfortable retirement, then you should consider your options. I have just had a GP retire under the 24hr rules who had big problems with the Lifetime Allowance and the Annual Allowance. He was 58, and I compared taking the pension now compared to staying in the scheme until 60. I then worked out he would have to live until 77 to break even, so guess what he did! So it’s not a question of never leave the scheme; it’s a question of when is it best for me to consider leaving.
This is where individual advice is required. So, is it simply a question of the best mathematical answer, or the best quality of life answer, and this must be provided by an independent qualified person who is regulated by the Financial Conduct Authority and can deliver objective advice. Seek specialist advice so you can make an informed decision regarding your pension. ●
Kevin Walker, NHS Pension Specialist, BW Medical Accountants. Blackett Walker is authorised & regulated by the Financial Conduct Authority.