NHS Pension: Complete
Locum GP Guide
McCloud remedy, LTA abolition, Annual Allowance, Scheme Pays, legacy schemes, SD55 calculator — everything locum GPs need to know about the NHS Pension in 2025/26.
McCloud Remedy — Important for pre-2015 members
If you were an active member of the NHS Pension Scheme on or before 31 March 2012, your pension for the period April 2015 – March 2022 may be calculated under legacy (1995/2008) scheme rules at retirement — this is the McCloud remedy. The choice between legacy and 2015 scheme calculation for that period can be worth tens of thousands of pounds.
Action: Seek specialist advice before making decisions about pension contributions or opt-out. Use the McCloud eligibility checker below.
New to NHS sessions? Here's why the pension matters
If you're doing NHS GMS/PMS sessions, you can stay in the NHS Pension Scheme as a locum — and you almost certainly should. The employing GP practice contributes 14.38% of your pensionable pay on top of what you earn. That's substantial free money you permanently lose for any sessions where you opt out.
Your employee contribution is tiered between 5.2% and 12.5% depending on your annualised pay, and it reduces your taxable income. The paperwork involves a Locum A (SD55) form submitted to NHS England after each session and a Locum B (SD55B) at year end — the calculator below guides you through the numbers.
You don't need to do anything special to join: if you're a GP on the NHS performers list, you're eligible. Just make sure each practice submits the SD55 on time.
NHS Pension Locum A/B Form Calculator
Calculate your pensionable pay, employee contribution tier, and what to put on your Locum A (SD55) and Locum B (SD55B) forms.
Only NHS GMS/PMS/APMS contract income is pensionable. Private work, medico-legal fees, and non-NHS income do not go on Locum A/B forms.
Mixed-income note: This calculator assumes all your income is NHS-pensionable. If you also have private income, enter only your actual NHS pensionable pay here — not your total earnings.
Your NHS Pension Summary
For OOH provider work, complete SD55B with the same pensionable pay figure. Your OOH provider will countersign as employer. Send the completed form to NHSBSA.
Based on NHS Pension Scheme (England & Wales) 2015 scheme employee contribution tiers. Employer rate 14.38% (2025/26; tiers unchanged from 2024/25). Tiers based on annualised pensionable pay (actual weeks worked used to annualise). Always verify figures with NHSBSA guidance and your NHS pension lead. Not financial or pension advice.
2025/26 NHS Pension Employee Contribution Tiers
Tiers are based on annualised pensionable pay — your actual pay scaled to a full 52-week year. England & Wales only.
| Annualised Pensionable Pay | Employee Contribution Rate | Example: £40k pensionable pay |
|---|---|---|
| Up to £13,259 | 5.2% | — |
| £13,260 – £26,831 | 6.5% | — |
| £26,832 – £32,691 | 8.3% | — |
| £32,692 – £49,078 | 9.8% | £3,920 / year |
| £49,079 – £62,924 | 10.7% | — |
| £62,925 and above | 12.5% | — |
| Employer contribution (all tiers) | 14.38% | £5,752 / year |
NHS Pension Scheme (England & Wales) 2015 scheme. Rates from April 2025 (tiers unchanged from 2024/25). Employer rate 14.38% per NHSBSA 2025/26 guidance — verify annually at nhsbsa.nhs.uk. Scottish locum GPs: see SPPA for Alpha scheme tiers.
NHS Pension Schemes: 1995, 2008, and 2015
Many GPs have service in more than one scheme. Understanding how each works matters for retirement planning — and for the McCloud remedy.
| Feature | 1995 Section | 2008 Section | 2015 Scheme |
|---|---|---|---|
| Scheme type | Final salary | Final salary | Career Average (CARE) |
| Accrual rate | 1/80th per year | 1/60th per year | 1/54th per year |
| Normal Pension Age | 60 | 65 | State Pension Age (67, rising to 68) |
| Lump sum | Automatic 3× annual pension | None automatic (commute at £12 per £1 pension) | None automatic (commute at £12 per £1 pension) |
| Revaluation | Final pensionable pay at retirement | Final pensionable pay at retirement | CPI+1.5% (active); CPI (deferred) |
| Early retirement | From age 55 with actuarial reduction | From age 55 with actuarial reduction | From NPA minus 10 years (from age 57) |
| Final pay controls | Yes — pay increases >CPI in final 3 years can trigger a tax charge | Yes — same rule applies | N/A — CARE revalues each year's accrual |
Partial Retirement
GPs can take a portion of their NHS pension while continuing to work, subject to a 20% reduction in pensionable pay at the point of drawdown. The minimum age is 55 (for 1995/2008) or NPA minus 10 years (2015 scheme). This can be tax-efficient for high earners approaching the Annual Allowance.
Normal Pension Age by Scheme
| Scheme | Normal Pension Age | Earliest retirement | Notes |
|---|---|---|---|
| 1995 Section | Age 60 | Age 55 | Actuarial reduction if taken before 60. Automatic 3× lump sum. |
| 2008 Section | Age 65 | Age 55 | Actuarial reduction if taken before 65. No automatic lump sum. |
| 2015 Scheme | State Pension Age (67, rising to 68) | Age 57 (NPA − 10) | Actuarial reduction if taken before SPA. Partial retirement available from 57. |
McCloud Remedy: Are You Affected?
The McCloud remedy allows eligible NHS pension members to choose — at retirement — whether the period 6 April 2015 to 31 March 2022 is calculated under their legacy scheme (1995/2008) or the 2015 scheme. Use this checker to find out if it applies to you.
Were you an active member of the NHS Pension Scheme on 31 March 2012?
Annual Allowance and Pension Input Amount (PIA)
The Annual Allowance (AA) is £60,000 for 2025/26. But for defined benefit schemes like the NHS Pension, the amount tested against the AA is not your contribution amount — it's the Pension Input Amount (PIA), which is much higher. Many GPs receive unexpected AA tax charges because they confuse the two.
How PIA is calculated (2015 scheme)
− (opening pension × 16 × CPI adjustment)
Closing pension = accrued annual pension at 5 April. Opening pension = accrued annual pension at 6 April of the prior year. CPI adjustment = September CPI from the prior year. The key insight: a £3,000 increase in your annual pension creates a PIA of approximately £48,000 — not £3,000.
Worked example
- Opening pension (6 Apr): £10,000/year
- Closing pension (5 Apr): £13,000/year
- CPI adjustment: 3% (Sep prior year)
- Closing value: £13,000 × 16 = £208,000
- Opening value: £10,000 × 16 × 1.03 = £164,800
- PIA: £208,000 − £164,800 = £43,200
- The AA is tested against £43,200 — not the ~£11,250 in contributions paid
The PIA is substantially larger than employee contributions because it reflects the growth in the value of the entire pension right, not just what you paid in that year.
Annual Allowance risk check
GPs earning over ~£60,000 pensionable pay should check their PIA each year. Use the NHSBSA Annual Allowance calculator and review your Total Reward Statement (available in the NHSBSA portal).
- ✓ Standard AA 2025/26: £60,000
- ✓ Tapered AA applies if: threshold income > £200,000 AND adjusted income > £260,000
- ✓ Taper reduces AA by £1 for every £2 of adjusted income above £260,000, down to a minimum of £10,000
- ✓ Money purchase annual allowance (MPAA) of £10,000 applies if you have flexibly accessed a DC pension
Carry-forward of unused Annual Allowance
If your PIA was below the AA in any of the previous three tax years, you can carry forward the unused allowance and add it to this year's £60,000. This is extremely useful for locums with variable income — especially those approaching retirement who want to maximise pension accrual.
2022/23 unused AA: £20,000
2023/24 unused AA: £15,000
2024/25 unused AA: £10,000
2025/26 current AA: £60,000
Total available AA: £105,000
Carry-forward requires pension scheme membership in each of the three prior years. The years are used oldest-first. Contact NHSBSA or a specialist adviser to confirm your carry-forward position.
Added Pension and NHS AVC: Topping Up Your 2015 Scheme
If you want to build more pension savings within the NHS umbrella — or are approaching your Annual Allowance and looking for options — Added Pension (AP) and the NHS AVC scheme are worth understanding.
Added Pension (AP)
Added Pension lets 2015 scheme members buy additional annual pension on top of their normal CARE accrual. You purchase a set amount of extra pension via a lump sum or regular contributions — the cost depends on your age and the pension amount.
- ✓ Directly increases your NHS pension at retirement
- ✓ Counts within the same Annual Allowance test as your regular NHS pension PIA
- ✓ Contributions qualify for income tax relief
- ✓ Elected through NHSBSA — see the AP election form on their portal
NHS AVC Scheme (Prudential)
The NHS Additional Voluntary Contribution (AVC) scheme is a defined contribution arrangement linked to NHS employment. It is currently administered by Prudential (formerly Capita).
- ✓ Invest alongside your NHS pension in a separate pot
- ✓ AVC contributions receive income tax relief
- ✓ AVC fund can be used to take tax-free cash at retirement (preserving your main pension)
- ✓ Contact Prudential or NHSBSA for current fund options and charges
Added Pension vs SIPP: Annual Allowance implications
Both Added Pension and SIPP contributions are counted within the same £60,000 Annual Allowance test. However, they interact with it differently:
- ✓ Added Pension: counted as a defined benefit input — it increases your NHS Pension PIA, tested under the DB calculation method
- ✓ NHS AVC: counted as a money purchase (defined contribution) input — counted pound-for-pound against remaining AA
- ✓ SIPP: also counted as a money purchase input, pound-for-pound against remaining AA
For GPs near the Annual Allowance, staying within the NHS pension environment (AP or AVC) can be advantageous for Scheme Pays access. A specialist pension adviser can model which combination best fits your situation.
Lifetime Allowance abolished — review your decisions
The Lifetime Allowance (LTA) was abolished from 6 April 2024. It has been replaced by two new allowances:
- ✓ Lump Sum Allowance (LSA): £268,275 — limits the tax-free cash at retirement
- ✓ Lump Sum and Death Benefit Allowance (LSDBA): £1,073,100 — limits total tax-free amounts on death and retirement
If you previously reduced your NHS pension contributions or opted out of the scheme because of LTA concerns, this decision may be worth revisiting with a specialist. Many GPs who opted out on LTA grounds have permanently lost employer contributions and pension accrual they cannot recover.
Fixed and Enhanced Protection: If you hold Enhanced Protection or Fixed Protection 2016, the transitional rules for the LSA and LSDBA differ — seek specialist advice before making any pension decisions.
Death Benefits: What the NHS Pension Provides for Your Family
Death benefits are often overlooked when evaluating the NHS Pension — but they represent substantial financial protection for your family. The benefits differ between the 1995 section and the 2015 scheme.
| Benefit | 1995 Section | 2015 Scheme |
|---|---|---|
| Death in service lump sum | 2× final pensionable pay | In-service death grant (2× reckonable pay) |
| Spouse / civil partner pension | 37.5% of your pension | 33.75% of your pension |
| Dependants pension | Yes — for eligible dependants | Yes — for eligible dependants |
| Children's allowance | Yes — for eligible dependent children | Yes — for eligible dependent children |
Nominate a beneficiary — action required
The death in service lump sum is a discretionary payment. NHSBSA decides who receives it based on your nomination. You must nominate a beneficiary to ensure the payment goes to your intended recipient promptly.
Without a nomination, NHSBSA uses its discretion — which can cause delays and the lump sum may form part of your estate, with potential inheritance tax implications.
Nominate a beneficiary at NHSBSA →Lump Sum and Death Benefit Allowance (LSDBA)
Since the LTA was abolished in April 2024, death benefits are tested against the Lump Sum and Death Benefit Allowance (LSDBA) of £1,073,100. For most NHS Pension members this is unlikely to be an issue — but if you hold significant other pension assets, check your total position.
The LSDBA covers both retirement lump sums and death benefit lump sums across all pension arrangements.
Scheme Pays: Paying Your Annual Allowance Charge
If you receive an Annual Allowance tax charge, you do not necessarily have to pay it out of your own pocket. The NHS Pension Scheme offers "Scheme Pays" — NHSBSA pays the charge on your behalf and reduces your pension at retirement.
Mandatory Scheme Pays
NHSBSA is required to pay the charge if:
- ✓ Your AA charge exceeds £2,000, AND
- ✓ Your pension input to the NHS Pension Scheme alone exceeds the AA
Voluntary Scheme Pays
You can also elect voluntary Scheme Pays even if the mandatory conditions are not met, e.g. where the charge arises from a combination of NHS pension and another scheme.
Critical deadline: 31 July
You must elect Scheme Pays by 31 July following the tax year in which the AA charge arose. For a 2024/25 AA charge, the deadline is 31 July 2026. Missing this deadline means you must pay the charge yourself — there is no extension.
Effect at retirement
NHSBSA calculates the actuarial reduction to your pension that offsets the charge it paid. The reduction is permanent and calculated using factors at the time of election. For example, a £10,000 AA charge paid via Scheme Pays might reduce your annual pension by approximately £400–£600 per year depending on your age and scheme.
Voluntary Scheme Pays elections must be submitted via the NHSBSA portal. See nhsbsa.nhs.uk/member-hub/scheme-pays for the election process. Actuarial factors (used to calculate the pension reduction) are published by NHSBSA — see nhsbsa.nhs.uk/member-hub/actuarial-factors for the current tables.
Should You Opt Out? Decision Framework
Opting out of the NHS Pension Scheme permanently forfeits the employer contribution for those sessions. It is rarely the right decision — but there are specific circumstances where it is worth considering.
Almost always wrong to opt out if:
- ✓ Your annualised pensionable pay is under ~£45,000 — Annual Allowance is almost never at risk
- ✓ You are opting out due to LTA concerns — LTA was abolished in April 2024
- ✓ You have not checked your actual PIA (you may be confusing contributions with pension input)
- ✓ You have carry-forward allowance available from prior lean years
May be worth discussing with a specialist if:
- ✓ Your adjusted income exceeds £260,000 and the tapered AA significantly reduces your allowance
- ✓ You have flexibly accessed a DC pension and the MPAA (£10,000) applies
- ✓ You have already exhausted all carry-forward and still breach the AA
- ✓ You are very close to retirement and Scheme Pays would significantly reduce the pension you need
SIPP Higher-Rate Tax Relief: Don't Leave Money with HMRC
Some locum GPs use a Self-Invested Personal Pension (SIPP) alongside their NHS Pension — particularly those with private income or who are not in the NHS Pension. Here's how SIPP tax relief actually works, and the common mistake that costs higher-rate taxpayers hundreds of pounds.
Relief at source mechanics
Most SIPPs operate on a "relief at source" basis:
HMRC adds: 20p (basic rate relief)
SIPP holds: £1 in total
HMRC automatically tops up your contribution with 20% basic rate relief. Your SIPP provider claims this directly — you don't need to do anything to receive it.
Higher-rate and additional-rate relief
The 20% basic rate relief is automatic. But 40% and 45% taxpayers are entitled to more — and must actively claim it through Self Assessment.
- ✓ 40% taxpayer: entitled to 40% total relief. The additional 20% (above basic rate) must be claimed via Self Assessment.
- ✓ 45% taxpayer: entitled to 45% total relief. The additional 25% must be claimed via Self Assessment.
On your Self Assessment return, report gross SIPP contributions. HMRC then adjusts your tax liability to reflect the extra relief.
Warning: higher-rate locums who may be under-claiming
Many locum GPs who pay 40% income tax and contribute to a SIPP are only receiving the 20% basic rate top-up. The additional 20% — worth £200 per £1,000 contributed — is not applied automatically and is lost unless it is claimed on the Self Assessment return.
Example: A higher-rate locum contributing £5,000/year (net) to a SIPP has a gross contribution of £6,250 after basic rate relief. At 40% tax, they are entitled to a further £1,250 in relief. Without a Self Assessment return (or if it is omitted from the return), that £1,250 is forfeited each year.
SIPP contributions and Annual Allowance
SIPP contributions are counted pound-for-pound against your Annual Allowance, alongside your NHS Pension PIA. The combined total of all pension inputs is tested against the £60,000 AA. If your NHS pension PIA alone is significant, check your remaining AA before making large SIPP contributions.
Use the tax calculator to estimate your taxable income and marginal rate. Add NHS pension employee contributions on your Self Assessment return to ensure SIPP relief is correctly calculated.
Agency vs Direct vs Bank Locum: NHS Pension Access
How you contract your locum work determines whether you can access the NHS Pension. This is one of the most financially significant decisions for locum GPs.
| Route | NHS Pension access | Tax treatment | IR35 risk | Admin burden |
|---|---|---|---|---|
| Direct engagement Self-employed, invoice to practice | Yes — SD55 (Locum A) | Self-employed / sole trader. NI Class 4. Pension contributions reduce taxable income. | Low (self-employed status established) | Medium — SD55 per practice, Self Assessment |
| Bank / sessional staff Employed by practice or PCN | Yes — via employer as PAYE | PAYE. Contributions automatic. Employer contributions paid by the practice. | N/A (employed) | Low — practice handles pension admin |
| Agency locum Via staffing agency | Typically no — agency is not an authorised employer | PAYE via agency (if deemed employed) or self-employed if truly outside IR35 | Higher — agency relationship scrutinised by HMRC | Low (agency handles) but no pension benefit |
| Ltd company director Via personal service company | No — Ltd companies cannot participate in NHS Pension Scheme | Corporation tax + dividend. Pension via SIPP (company contribution). Loss of NHS Pension employer contribution. | Needs individual assessment — most direct GP engagements are outside IR35; seek advice for agency arrangements. | High — Companies House, corporation tax, payroll |
* OOH providers vary — check whether your OOH employer is a registered NHSBSA employer before assuming pension contributions are being made. Some OOH providers are registered; others are not.
Your Total Reward Statement (TRS)
NHSBSA publishes an annual Total Reward Statement for every NHS pension member. It shows your accrued pension, projected retirement income, and — critically — your Pension Input Amount for the previous year. Many locum GPs don't know it exists or struggle to interpret it.
- ✓ Log in at nhsbsa.nhs.uk
- ✓ Find your TRS under "Pension tools and resources"
- ✓ Check your PIA figure — this is what HMRC will use to assess your Annual Allowance
- ✓ Review accrued pension and projected retirement income
- ✓ Confirm your McCloud remedy status if you have pre-2015 service
NHS Pension Locum — Frequently Asked Questions
What is the NHS Pension Locum A form (SD55)?
The SD55 (Locum A) is the form self-employed locum GPs use to report pensionable pay from sessional work at NHS GP practices. It captures total NHS locum fees, the annualised pay figure (used to determine your employee contribution tier), employee contributions, and the employer (practice) contributions. The practice manager must countersign the form before it is sent to NHSBSA.
What is the Locum B form (SD55B)?
The SD55B (Locum B) covers NHS Out-of-Hours (OOH) work. If you locum for an OOH provider such as an NHS 111 co-op or similar, your OOH earnings should be captured on a separate SD55B rather than SD55. The OOH provider's authorised signatory countersigns in place of the GP practice.
How do I calculate my annualised pensionable pay?
Annualised pensionable pay = (pensionable pay in the period ÷ number of weeks actually worked) × 52. This figure is used solely to determine which contribution tier you fall in — it doesn't change how much you actually pay, which is calculated against the real pensionable pay figure. Use the calculator above to compute this automatically.
Are NHS pension contributions tax-deductible for locums?
Yes. Employee pension contributions to the NHS Pension Scheme reduce your taxable income for Self Assessment purposes. If you pay 40% income tax, each £1,000 of NHS pension contributions effectively costs you £600 after tax relief. Ensure your accountant records these on your tax return — they are not deducted automatically like employee contributions for PAYE workers.
Can I opt out of the NHS Pension as a locum?
Yes — but you should think very carefully before doing so. Opting out means forfeiting the employer contribution (14.38%) and losing all pension accrual for those sessions. It is particularly important to note that the Lifetime Allowance was abolished in April 2024, so any opt-out decisions made on LTA grounds should be revisited. See the opt-in/out decision framework section above.
How does the McCloud remedy affect my NHS Pension?
The McCloud remedy applies to NHS Pension members who were in service on 31 March 2012 and transitioned to the 2015 scheme. For the period 6 April 2015 to 31 March 2022, NHSBSA will offer a "deferred choice" at retirement: you can choose whether that period is calculated under your legacy scheme (1995 or 2008) or the 2015 scheme, whichever gives a higher pension. Use the eligibility checker above.
What if the GP practice refuses to sign my Locum A form?
Remind the Practice Manager that signing SD55 is part of the standard GMS/PMS contract obligations when engaging locum GPs. If they remain reluctant, escalate to your local NHS England Primary Care Team or contact NHSBSA directly for guidance. Keep all evidence of locum sessions (invoices, booking confirmations) as supporting documentation.
I work for multiple practices — one form per practice?
Yes. A separate SD55 must be completed for each GP practice you worked for during the period, with each practice countersigning its own form. When working for multiple practices in the same quarter, each SD55 covers one practice for that period. The annualised pay figure on each form is calculated using your overall weeks worked across all forms for tier purposes.
What is the difference between the Annual Allowance and my NHS pension contributions?
Your NHS pension contributions (e.g. 9.8% of pensionable pay) are what you actually pay. The Annual Allowance (£60,000) is tested against the Pension Input Amount (PIA), which is much larger — it reflects the growth in your pension rights that year. For the NHS Pension, PIA = (pension increase × 16) + lump sum increase − (opening value × CPI). See the AA and PIA section above for a worked example.
What is Scheme Pays and do I have to use it?
Scheme Pays is an option to have NHSBSA pay your Annual Allowance tax charge, reducing your pension at retirement instead. You are required to be offered it if your charge exceeds £2,000 and your pension input alone exceeds the AA. You can also elect it voluntarily. The 31 July deadline after the relevant tax year is strict — there is no extension. See the Scheme Pays section above.
Does IR35 apply to locum GPs?
IR35 (off-payroll working rules) can apply to locum GPs who work through a limited company or personal service company (PSC). For direct engagements where you invoice the GP practice as a self-employed sole trader, IR35 is generally not a concern — HMRC treats these as straightforward self-employed arrangements. The risk increases for locums working through agencies or NHS Trusts under a PSC structure. Most directly-engaging sole trader locum GPs operate outside IR35, but if you use a limited company you should obtain a status determination for each engagement. See our IR35 guide for locum GPs for more detail.
Also use our UK Locum GP Tax Calculator
Your NHS pension employee contributions reduce your taxable income. Add your pension amount to the tax calculator to see your true take-home after tax.
Open Tax Calculator →