What is the NHS pension scheme?
The NHS Pension Scheme is an attractive benefit for those that work extremely hard in the challenging environment of the country’s health service.
On 1 April 2015, some significant changes to the pension schemes offered by the NHS were introduced. The kind of deal you get when you retire will depend on when you joined the scheme.
Which? explains what you need to know about the NHS Pension Scheme - from how it works, the different schemes operating, how much you pay in - and how much you can expect to get back.
NHS pensions: which scheme applies to me?
There are three different 'sections' of NHS Pension Scheme - the 1995 Section, the 2008 Section and the 2015 Section.
The 1995 and 2008 Sections of the NHS Pension Scheme pay a final salary pension. The 2015 Section pays an income based on your career average earnings, which is less generous than the final salary scheme.
Some people who were members of the original 1995 or 2008 sections of the NHS pension scheme were moved into the 2015 Section on 1 April 2015.
But others qualify for 'protection' because the age at which they could claim their pension was close when the changes were introduced.
How much do I contribute to my NHS pension?
Contributions rates into your NHS pension have now been fixed for the period April 2015 to 2021 and apply to both the 2015 and 1995/2008 schemes.
Both full-time and part-time workers pay a percentage of their gross salary into their pension each month. This is topped up by employer contributions and you’ll receive pension tax relief on your contributions.
Contributions are based on your previous years' pensionable earnings and are shown below as a percentage of gross salary (before tax relief).
The employer’s contribution rate changed from 14.38% to 20.68% on 1 April 2019, which includes a scheme administration charge of 0.08%.
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When can I collect my NHS pension?
You get your pension at what is called the 'normal pension age'. This is the age that you retire from working for the NHS and have your pension paid without facing a reduction for early payment.
You can retire early and claim you pension once you reach the minimum pension age (55). However, if you do this your pension benefits will be reduced, to reflect the fact that your pension will pay out for longer.
Your normal retirement age varies depending on what section of the scheme you're in.
- 1995 Section - normal retirement age is 60
- 2008 Section - normal retirement age is 65
- 2015 Section - normal retirement age is your state pension age.
If you've built up benefits in more than one section of the scheme, you can take them when you reach your normal pension age - without having them reduced.
So, if you were part of the 1995 Section, for example, you could claim your pension at 60 and carry on working. However, you cannot undertake NHS work for more than 16 hours a week in one month after you collect your pension.
How much will a NHS pension pay in retirement?
The amount of income you'll be paid from your NHS pension depends on the scheme you're in. If you're in both the 1995/2008 final salary scheme and the 2015 career average scheme, you'll get a combination of the two.
What happens if I have a break in service?
If you leave NHS employment and then return, what scheme you subsequently come under will depend on the length of the break and the level of protection you have.
What happens to my NHS pension when I die?
This scheme also looks after your family if something should happen to you. The NHS Pension Scheme provides lump sum and pension benefits in the event of your death, which are detailed below:
Lump sum on death
You can nominate that your spouse, registered civil partner or qualifying nominated partner receive a lump sum when you die. The lump sum will be around 2 x annual earnings.
Adult dependent’s pension
An adult dependent’s pension is payable for life to an eligible spouse, civil partner or nominated qualifying partner. The benefit is worth around 34% of the full pension.
Children’s pensions are payable for an eligible child or children under the age of 23. The benefit is worth around 17% of the full pension.
Get an expert answer on your pensions
Our Which? Money Helpline experts can give you independent one-to-one guidance on all kinds of pension queries. If you're not a Which? member and you'd like to get unlimited access to the helpline, you can try Which? Money for one month for £1.