The Department of Health and Social Care (DHSC) has published the outcome of the consultation on proposed amendments to the NHS Pension Scheme regulations to be introduced in April 2024.
Changes that apply to all members
Contribution rates may change
The following changes to contributions confirmed by DHSC are the second and final phase of reforms informed by the latest review.
The amount many members pay will stay the same, and some will pay less. For members who will pay higher contributions, the maximum increase from 1 April 2024 is 0.8%, which means the difference to contribution amounts is likely to be small.
|
Pensionable salary range |
Contribution rates from 1 April 2024, based on actual annual pensionable pay |
|---|---|
|
Up to £13,259 |
5.2% |
|
£13,260 to £26,831 |
6.5% |
|
£26,832 to £32,691 |
8.3% |
|
£32,692 to £49,078 |
9.8% |
|
£49,079 to £62,924 |
10.7% |
|
£62,925 and above |
12.5% |
Employers will contribute more
From 1 April 2024, the amount employers pay towards members’ pensions will go up from 20.6% to 23.7% of pensionable pay.
Changes to the way contribution tiers are reviewed each year
Contribution tiers will be automatically reviewed in line with the % increase in the Consumer Price Index (CPI) on 1 April every year, with the exception of the lowest tier. This rate already anticipates that members’ earnings in this tier may not be high enough to benefit from tax relief on their pension contributions. If the Agenda for Change pay award for England that is announced later in the year is higher than the increase in CPI, contribution tiers will be updated to reflect the higher pay award.
Changes that only affect some members
Overtime is pensionable for part-time workers except where a member has recently taken partial retirement
Overtime/additional hours for part-time members counts as pensionable pay up to their full-time equivalent pay, unless they have taken partial retirement in the previous 12 months. For these members, any additional hours worked above their contractual hours won’t count towards pensionable pay during the 12-month period after partial retirement..
‘Abatement’ rules will be removed for good
The rules for how a pension might be reduced for Special Class and Mental Health Officer (MHO) members who retire on age grounds but return to work before age 60, have been suspended since March 2020. These rules will be removed permanently.
So, from age 55, Special Class and MHO members can take up to 100% of their pension benefits, stay in work, and continue to build up pension benefits in the 2015 Scheme – without having their pension reduced or stopped.
1995 Section members with maximum service will be able to apply for partial retirement
The existing regulations do not let members of the 1995 Section take partial retirement if they have reached their maximum service limit. These members can now apply for partial retirement from 1 April 2024, if they have the support of their employer.
Lifetime allowance (LTA) charges will no longer apply
HM Treasury announced in March 2023 that the LTA would be removed. DHSC has confirmed updates to the relevant Scheme regulations which will make sure these rules continue to work as intended once the LTA is removed on 6 April 2024.
Carer’s leave will count towards pensionable service
In line with the Carer’s Act 2023, members who take carer’s leave will continue to build up pension benefits during this time away from work. Employers will continue to pay contributions based on their pensionable pay, and members will pay any contributions they owe when they return to work.
You can read more about the proposed changes via the government website:
NHS Pension Scheme: member contributions phase 2 and miscellaneous amendments - GOV.UK (www.gov.uk)