Changes to the NHS pension scheme will see just under half of members paying more into their retirement savings pot from this April, Government figures have revealed.
Around 47% of members will see their pension contribution rates increase – although 29% of members will see them cut. Meanwhile, 24% of members will see their rates remain the same.
The adjustments are a result of the NHS pension scheme moving from an 11-tier member contribution structure to just six tiers on April 1. Each tier sets the pay thresholds that determine how much an individual pays into their pension, so contributions are made on a sliding scale.
The change taking place in April was first consulted on in 2021, under a wider review of pension rules.
However, amendments to NHS Pension regulations needed to update the member contribution structure were only been laid before Parliament in a report presented earlier this month.
This report said that ‘many members will see the cost of accruing pension scheme benefits change on 1 April 2024’.
Of those members that see their rates increase, the majority (92%) will still pay below 9.8%, it explained, which is the percentage of earnings required to be paid by members on a collective basis to cover the cost of pension benefits.
This means that the majority still ‘effectively receive a discount on membership of the NHS Pension Scheme.’
The report also sets out a new process for thresholds to be updated annually. From April 1, they will automatically be linked to inflation via the consumer prices index (CPI) and be increased further if necessary to align them to Agenda for Change (AfC) pay increases in England.
Under separate plans, the employer contribution rate for the NHS pension scheme will rise from 20.6% to 23.7% also at the start of April, the Government confirmed last month.
To see how the changes to individual contribution rates affect you, compare the two tables below.
Table 1: Current contribution rates paid by members into NHS pension
| Tier | Pensionable earnings | Member contribution rate from 1 April 2023 |
| 1 | Up to £13,246 | 5.1% |
| 2 | £13,247 to £17,673 | 5.7% |
| 3 | £17,674 to £24,022 | 6.1% |
| 4 | £24,023 to £25,146 | 6.8% |
| 5 | £25,147 to £29,635 | 7.7% |
| 6 | £29,636 to £30,638 | 8.8% |
| 7 | £30,639 to £45,996 | 9.8% |
| 8 | £45,997 to £51,708 | 10.0% |
| 9 | £51,709 to £58,972 | 11.6% |
| 10 | £58,973 to £75,632 | 12.5% |
| 11 | £75,633 and above | 13.5% |
Table 2: New contribution rates to be paid by members from 1 April, 2024
| Tier | Pensionable earnings | Member contribution ratefrom 1 April 2024 |
| 1 | Up to £13,259 | 5.2% |
| 2 | £13,260 to £26,831 | 6.5% |
| 3 | £26,832 to £32,691 | 8.3% |
| 4 | £32,692 to £49,078 | 9.8% |
| 5 | £49,079 to £62,924 | 10.7% |
| 6 | £62,925 and above | 12.5% |
