The Department of Health and Social Care has announced a consultation on proposed changes to the member contribution rates for the NHS Pension Scheme.
New structure for member contributions
This new member contribution structure will contain new tiers and new contribution rates.
The consultation proposes that this new structure will be introduced over two years.
The first changes will be introduced in April 2022 and these will be followed by the remaining changes in April 2023.
Proposed changes to how contribution rates are calculated for part-time staff
If you work part time, the consultation proposes that your pension contributions will be calculated on your actual annualised earnings from the previous scheme year, instead of your whole-time equivalent (WTE).
For example, currently if a part-time member earns £30,000 per year working three days a week (which is 60% of their WTE), then their contribution rate is based on their whole-time equivalent earnings of £50,000. So, the contribution rate is higher, even though it only applies to their actual earnings of £30,000.
From 1 April 2022, the consultation proposes that the contribution rate for a part-time member will be based on their previous year’s pensionable earnings, which in this example would mean that the member’s contribution rate will be based on earnings of £30,000.
The consultation also proposes that from 1 April 2023, where a member has multiple part-time roles at the same time, their salaries will be combined for the purposes of setting their contribution rate.
The full list of proposed changes includes:
- introducing a new member contribution structure containing new tiers and contribution rates
- phasing in changes to the member contribution rates over a two-year period
- using actual annualised rates of earnings to set members’ contributions tiers (instead of using whole-time equivalent earnings) from 1 April 2022
- aggregating multiple part-time employments to set members’ contribution tiers where members have employment across different employers - this change would be phased in from 1 April 2023
- index-linking the tier boundaries
- transitional provisions
You can find more information on all the proposed changes on the consultation webpage on GOV.UK.
The Department of Health and Social Care welcomes any comments or views on its proposals.
You can have your say on the proposed changes by responding to the consultation before the closing date.
How to respond
The consultation will close at 11:45am on 7 January 2022.
You can submit your comments online.
We expect the outcome of the consultation to be published in the new year.