NHS pension

Please see our advice guide for more information on age discrimination in the NHS pension scheme.

If you have been advised of a pension shortfall contact us for support.  

The Department for Health and Social Care announced changes to the contribution rates from 1 April 2024.

Contribution rates from 1 April 2024

Abatement refers to a set of rules with the NHS pension scheme that impact retired and returned members. Under the rules, if your salary on return plus your pension exceeds your pre-retirement earnings, your pension will be reduced pound for pound. Following representation by the RCN, during the Spring Budget in 2023, the Government announced plans to formally abolish abatement. Therefore, members who retired and returned can continue working additional hours without a reduction to pension benefit.

For further information on abatement, please see our current consultations.

• If you have an unclaimed 1995 pension and you are over the age of 60, you are potentially missing out on pension benefits. The 1995 section is now closed and your pension benefit will not increase even if you continue working. All future contributions will be counted in the 2015 scheme. We recommend considering whether retire and return or partial retirement options may be beneficial. We recommend that you take independent financial advice on your retirement planning needs and arrangements. This may include using the services of Quilter Financial Advisers.
• If you have an unclaimed 2008 pension and you are over the age of 65, you are potentially missing out on pension benefits. The 2008 section is now closed and your pension benefit will not increase even if you continue working. All future contributions will be counted in the 2015 scheme. We recommend considering whether retire and return or partial retirement options may be beneficial. We recommend that you take independent financial advice on your retirement planning needs and arrangements. This may include using the services of Quilter Financial Advisers. 

As the cost-of-living crisis continues to impact nursing staff, increasing numbers of NHS staff are choosing to opt out of the pension scheme.

The RCN strongly recommends taking independent financial advice before making any pension related decisions as the financial consequences of opt out can be more detrimental in the long term.

Members should consider the following points before deciding to opt of the NHS pension scheme:

• The NHS pension provides a vital income for members in retirement. Opting out reduces the pension benefit payable meaning members will need to work longer and/or face poverty in retirement. 
• In addition to members’ pension contributions, employers make a contribution of 20.8% of pensionable pay. This equates to roughly £5,778 per year for a mid-point band 5 staff member and this contribution will be lost to members who opt out.
• Active pension members can access their full pension in the case of permanent incapacity. However, opting out has the potential to reduce the potential ill health retirement benefits members can access.
• Active pension members can also access a death in service benefit of approximately 2 years’ pay. However, following opt out, members’ benefits are reduced to approximately 2 x the annual pension members would have received if they retired on their date of death. This is likely to represent a significant reduction in the amount payable to members’ nominated beneficiaries. 

Members experiencing financial issues can access expert advice and support via the RCN welfare service.

Re-joining the 1995 scheme after retirement

Previously, members with 1995 pension benefits who retired and returned to work inside the NHS could not re-join the NHS pension scheme. Most employers offered a NEST scheme as an alternative pension option. However, from April 2023 retired members in receipt of 1995 benefits are able to re-join the 2015 NHS pension scheme whilst still in work. Members will also have the option to transfer accrued NEST benefits to their 2015 scheme, should they choose to re-enter the NHS scheme whilst they remain in work and if they are still under their normal retirement age.

Partial Retirement

In October 2023 a new partial retirement option became available to support staff to work more flexibly up to and beyond retirement age. Partial retirement enables older staff to partially retire, or for those that have already retired to return to work, and either claim all or part of their pension whilst continuing to work and build more pension benefits. This will apply to members of all NHS pension schemes.

Full details of retire and return options are detailed in guidance from NHS England and the NHS Pension Business Services Authority (for members in England and Wales) and the SPPA website (for members in Scotland). HSC Pension Service in Northern Ireland has information about their scheme. 

The RCN is not regulated to provide financial advice therefore members are strongly encouraged to seek qualified and independent financial advice before making any decisions. RCN members can access free independent financial advice from Quilter Financial Advisers.

Auto-enrolment refers to the process where an employer automatically signs up eligible workers into a pension scheme or similar savings scheme. This is in addition to any state pension retirement benefit. 

Employees and employers make payments into the scheme and the Government also contributes in the form of tax relief. Employers can choose any scheme that meets the necessary criteria and employees can opt out of the auto-enrolled pension provision. Please see Gov.uk for more information.

Bank staff

For the purpose of auto enrolment in the NHS, workers are categorised into one of three categories: eligible jobholder, non-eligible jobholder or entitled worker. This is done by assessing age, worker status and qualifying earnings. For more information please see the NHS Employers information on auto-enrolment.

If the worker has two roles with separate NHS employing organisations (with separate PAYE references) both organisations are legally required to assess the worker under automatic enrolment legislation. If the employee has a whole time substantive job and also has a zero hours/bank arrangement with the same employer, the two arrangements can be aggregated as a ‘single employment relationship’ with the pensionable hours capped at normal whole time hours, within the scheme rules. 

What is it?

Special Class Status (SCS) is a pension provision for certain groups of scheme members who were in the NHS pension scheme on or prior to March 6 1995 and who meet other eligibility criteria laid out in the scheme regulations for the 1995 section of the 1995/2008 (“old”) pension scheme. It is not available to those who only joined the NHS pension scheme after March 6 1995 or who are in the 2008 section of the old scheme or the 2015 scheme. 

Please see more about special class status on the NHSBSA website.

What do I do if my SCS eligibility is in doubt? 

Employers are advised to confirm the SCS eligibility of posts with the pension administrator on appointment. So if you move to a new job, you should check the eligibility of that post and not assume that, because your last role was an eligible role that your new one will be automatically. If your employer is questioning SCS eligibility it may be necessary to revisit relevant job information e.g. job descriptions and person specifications, to ensure that the nursing demands of the role are adequately described and the post coded appropriately. Employers can ask for support from the pension administrator to do this.

If you think you have lost your SCS or are at risk at losing it, please contact us.

I moved to a management job and I’ve been told I no longer have SCS

SCS is not carried with the individual nurse. It is the duties that the nurse does in their pensionable employment that establishes whether or not the role meets the SCS criteria. It is often this aspect of SCS that causes nurses difficulty as they advance in their careers, especially those who move to more managerial or strategic roles.

For many nursing roles the definition will be clear; a nursing post on a ward or in a clinic in daily contact with patients would usually meet the SCS criteria without issue. As a minimum the post would need to have an essential requirement to hold a nursing qualification, but in reality the job description and the person specification should also reflect the fact that it is a nursing role. 

The issue is less clear cut with more senior nursing roles that are partly clinical and partly managerial, and where there may be less direct contact with patients or the needs of patients. When this is the case the essential SCS test has to be met – the role must meet the requirement that it is ‘pensionable employment as a nurse’ and a nursing qualification must be an essential requirement.

It is the employer who makes the first consideration of whether a role meets SCS criteria or not. It is important to note that employers do not have the authority to guarantee or confirm SCS to any nurse. Only the pension administrator can do this. At the time of retirement, the pension administrator will check SCS eligibility and they can also investigate an individual member on their employer’s behalf to determine whether a job attracts the status or not.

Please see our advice guide on ill-health retirement.

Staff who are transferred out of direct NHS employment to another employer under a TUPE transfer are now generally able to stay in the NHS pension scheme. Previously TUPE regulations only required that a broadly comparable pension be provided by the new employer.

Fair Deal guidance, published in October 2013 by HM Treasury confirms how staff whose employment is transferred under TUPE can retain membership of their current public sector scheme. Fair Deal will apply in the majority of cases; if your employer is suggesting that it does not apply, please contact us.

Widening access 

The national social partnership forum has developed the terms of access to the NHS pension scheme for non-NHS organisations providing NHS clinical services (independent providers or IPs), in situations where staff are employed by the IP, but have not transferred from the NHS (and so are not covered by New Fair Deal). This is called ‘Access’. 

These terms allow access to the NHS pension scheme where IPs deliver services under an Alternative Provider Medical Services (APMS) contract, an NHS Standard contract, or a Local Government contract in relation to public health services - including services procured under 'Any Qualified Provider' - and covers both clinical and non-clinical staff delivering a ‘clinical service’.

Under the arrangements, IPs can decide if they wish to offer the NHS scheme to their staff delivering clinical services. If they do wish to IPs can choose from two levels of access. 

• Level one: access for existing members.
  IPs are required to auto-enrol into the NHSPS: from the date of commencement as an NHSPS employing authority, all existing eligible staff who were entitled to participate in the NHSPS at any time in the previous 12 months, and from the date of recruitment, all new eligible staff who were entitled to participate in the NHSPS at any time in the 12 months before joining the IP. Staff should be 'wholly or mainly' engaged in delivering NHS ‘clinical services’ to retain access. 
• Level two: access for all eligible staff.
  IPs are required to offer access to all staff who are eligible to join the NHSPS and are 'wholly or mainly' engaged in NHS work. Further information is available on the NHS Employers website.

From 2023 staff working in Primary Care Networks (PCNs), such as GPs and general practice staff, have automatic access to the NHS Pension Scheme. Previously such members had to apply for time-limited access on an ad-hoc basis however, this requirement is now removed.

Members can increase their pension benefit in two ways:

• by earning more while in work (increasing hours or seeking promotion), or

• by making additional contributions (lump sum or regular contribution).

For more information, please see the NHSBSA calculator.

In the first instance, any problems relating to your pension should be directed to your pension provider. If your query relates to the state pension, contact the Department for Work and Pensions (DWP).

Many secondary sources of advice and/or support are only available once you have exhausted your own pension provider’s dispute resolution process.

Members who are in dispute with their pension administrator over the number of years’ worth of contributions they have made should know that records of all contributions and refunds are kept by administrators until a member’s retirement. It is worth asking for a statement from theses archived or microfiche files.