About the NHS Pension Scheme
The NHS Pension Scheme is one of the most generous public sector pension schemes in the UK. There are three sections, though most active members now accrue benefits in the 2015 scheme following the April 2022 transition.
2015 CARE Scheme: Benefits accrue at 1/54th of your pensionable earnings each year. Your pension is based on career average revalued earnings (CARE), meaning each year's earnings are revalued in line with CPI + 1.5%. This is the scheme all active NHS members now contribute to.
2008 Section: Benefits accrued at 1/60th of your final pensionable salary per year of membership. This was a final salary scheme with a normal pension age of 65. Existing benefits remain in this section for those who were members before April 2022.
1995 Section: Benefits accrued at 1/80th of your final pensionable salary per year of membership, plus an automatic tax-free lump sum of 3x your annual pension. This section had a normal pension age of 60. Like the 2008 Section, accrued benefits remain here for former members.
Your contribution rate is based on your total pensionable pay and is deducted before tax, providing automatic tax relief. The employer contribution rate is approximately 23.7%, making the NHS pension an extremely valuable part of your total reward package.
Frequently Asked Questions
How is the NHS pension calculated?
NHS pension is calculated differently depending on your scheme. The 2015 CARE scheme builds up at 1/54th of your pensionable earnings each year, revalued annually by CPI + 1.5%. The 2008 Section accrued at 1/60th of final salary per year of membership, and the 1995 Section at 1/80th of final salary plus an automatic tax-free lump sum of 3x your annual pension. Since April 2022, all active NHS members accrue new benefits in the 2015 scheme.
What are the NHS pension contribution rates?
NHS pension contribution rates for 2025/26 in England & Wales are tiered based on your pensionable pay: 5.2% for earnings up to £13,247, 6.5% for £13,248-£27,797, 8.3% for £27,798-£33,863, 9.8% for £33,864-£50,843, 10.7% for £50,844-£65,189, and 12.5% for £65,190 and above. These rates apply to your whole salary, not just the portion within each band.
Which NHS pension scheme am I in?
Most active NHS staff are now members of the 2015 NHS Pension Scheme following the April 2022 transition. If you were previously in the 1995 or 2008 Section, your past service remains in that scheme, but all new service from April 2022 onwards accrues in the 2015 scheme. You can check your pension scheme membership through the NHS Pensions Online portal or on your payslip.
Can I opt out of the NHS pension?
Yes, you can opt out of the NHS pension scheme, but it is generally not recommended. The NHS pension is one of the most generous public sector pension schemes, with employer contributions of around 23.7%. If you opt out, you lose this employer contribution and the tax relief on your own contributions. You can opt out by completing an opt-out form through your employer. If you opt out, you will be automatically re-enrolled every 3 years under auto-enrolment rules.
What are NHS pension AVCs?
Additional Voluntary Contributions (AVCs) allow NHS staff to top up their pension by making extra contributions through the Shared Cost AVC scheme. Under this arrangement, your employer redirects some of your pay to an AVC provider (currently Fidelity), saving you National Insurance contributions. AVCs are taken before tax, providing automatic tax relief. You can choose from a range of investment funds and use the pot to buy additional pension, take a tax-free lump sum at retirement, or a combination of both.
How does the NHS pension affect take-home pay?
NHS pension contributions reduce your gross pay before calculating take-home pay. However, because contributions receive tax relief (they are deducted before income tax is calculated), the net cost is lower than the headline rate. For example, a Band 5 nurse earning £31,049 pays 8.3% (£2,577 per year), but the actual reduction in take-home pay is around £2,062 because of the 20% tax relief. Use our
pension calculator to see the exact impact on your take-home pay.