GP - 24 hour retirement explained

Dr Tony Grewal, medical director at Londonwide LMCs explains to GP Magazine readers the perils to avoid after taking their NHS pension. Reporoduced with thanks to GP Magazine www.gponline.com.

Dr Grewal: your first step in this process is to confirm with NHS Pensions it assessment of the current size of your pension pot. 

There is little point for most of us (late starters excepted) in waiting to collect our NHS pensions beyond the age of 60. The threat of being compelled to work to 65, following the Hutton Review of public sector pensions, to earn the full pension is concentrating our minds. 

Many GPs, however, still feel able to work, so what are the steps we can take to avoid the perils in the transition from being a partner to a pensioner with the freedom to work fewer hours with a better work/life balance?

Top tips

  • Make sure you have got the sums right.
  • Get everything in writing, especially agreements with the PCO.
  • Single-handed GPs need to be particularly careful as because they must resign their NHS contract when taking 24-hour retirement. PCOs are not obliged to give them a new contract.

There are three ‘P’s’ on this pathway to financial and professional paradise called 24-hour retirement: pension, practice and primary care organisation (PCO). 

Pension

Your first step in this process is to confirm with NHS Pensions (or its equivalents if your practice is in Scotland or Northern Ireland) its assessment of the current size of your pension pot. It does sometimes make errors, so getting independent advice is worthwhile.

Look at examples of the balance between lump sum and pension income, and remember that a high practice income plus your pension may put you into a ‘super tax’ bracket - an income of £150,000 or more a year will mean paying 50% tax.

Practice

Assuming you are in a partnership, let your partner(s) know your plans in plenty of time, and make sure they want you back. Negotiate what your standing with the practice will be on your return and remember that to obtain your pension, you must retire from the NHS for 24 hours and may not do more than 16 hours’ NHS work a week for four weeks afterwards.

Get all agreements in writing, and ideally have a signed and dated contract for returning to the partnership or appendix to your partnership deed. Decide with your partners how you wish to handle dissolution accounts, notional rent payments and equity in the practice.

Primary care organisation

Agree your intentions with the PCO obtain their agreement in writing and check the required notice period in your NHS contract. Most PCTs will not raise difficulties, although they often ask for more information than is required.

It is your right to retire and return, and they cannot refuse a reasonable variation to a GMS contract should you choose to return as a contractor. The PMS contractual position is different; PCOs have discretion over agreeing to 24-hour retirement and you may need LMC advice and support in negotiating this.

Single-handed GPs intending to retire and return face a more difficult path. When you resign your NHS contract (which you must do to collect your pension), the responsibility for the practice and patient services falls to the PCO. You would have to sign a new contract when you return, and granting you a contract is at the absolute discretion of the PCO.

Technically the PCO would in fact be creating a ‘new’ single-handed practice, which under government policy is nowadays frowned upon.

The PCO would also have to run your practice (and employ your staff) for a month, and many PCOs would use this opportunity to investigate and criticise your practice. If you manage to get your PCO to agree to this, make sure it will not uncover flaws in the way you have been practising. Realistically, in the current climate, a single-handed contractor’s only safe way forward is to appoint a partner who is also a signatory to the practice’s NHS contract well in advance of retirement (and make sure you have safeguards in writing with the partner enabling you to return).

As an alternative, you may wish to merge with a neighbouring practice. This may have other advantages, particularly if you would like to see you patients and staff well looked after a few years down the line when you retire fully. Again, be prepared to ask for advice and support from your LMC.

Good luck, and enjoy.

Resources

Last updated : 14 Jul 2016

 

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