The NHS Pension Scheme

Staff have the option of contributing to the NHS final salary pension scheme.  Although the pension scheme is currently under review, the current scheme provides:

• A retirement pension based on 1/80 of your pay at retirement for each year of Scheme membership.
• A tax free lump sum on retirement equal to 3 times pension.
• Life assurance of 2 years' pay while you are working.
• Pensions and allowances for your husband or wife and children if you die.
• Benefits if you have to retire because of ill-health after 2 years' membership - improved benefits after 5 years' membership.
• Improved benefits if you are made redundant at or after age 50.

Pensions and allowances are fully index linked to protect their value.

Benefits are guaranteed and are based on your pay and membership of the Scheme.

From age 50 you can choose when to retire.

You do not pay administration costs.

Pension benefits can be transferred into and out of the Scheme, but if you change jobs in the NHS your membership will continue.

You can increase your contributions to get bigger benefits.

The contribution rate for most members is 6% of pay; manual workers pay 5%. But the real cost is normally around 3½% because

You get tax relief on your contributions, and you pay a lower rate of National Insurance contributions because you are contracted out of the State Earnings Related Pension Scheme.

Actuaries have assessed the benefits as being worth around 20% of overall pay. Your employer and Government pay the extra required to meet the total cost of the benefits.  For more information click here.