Each year, 2015 Scheme pensions for members who are still actively contributing are reviewed to keep up with the rise in cost of living. The 2015 Scheme pensions are reviewed using the Consumer Price Index (CPI) in the year before, plus an additional 1.5%.
This is called ‘revaluation’ and it usually happens on 1 April, but from 2023 onwards it will happen on 6 April.
For GPs, non-GP providers, and dental practitioners, this uplift happens to your pensionable earnings in the 1995 and 2008 Sections, and it will also take place on 6 April from 2023 onwards.
The Department of Health and Social Care has confirmed the change of date in the outcome of its recent consultation NHS Pension Scheme: proposed amendments to scheme regulations consultation response (GOV.UK).
The DHSC is making the change to address a gap between the CPI used to calculate in-service revaluation of 2015 Scheme benefits and the CPI used for working out the pension growth for annual allowance tax calculations. This means that the pension growth calculation will only consider growth in pension benefits above inflation.
Annual allowance is the maximum amount of pension savings a member can contribute to their pension in one tax year that benefit from tax relief.
The value of your pension benefits won’t go down because of this change, but it does mean that if you’re affected by pensions tax you won’t have a larger annual allowance tax charge to pay in 2023 because of high inflation.
We’re updating our annual allowance webpage following confirmation of the changes.
In the meantime, you can read more about the changes at NHS Pension Scheme: proposed amendments to scheme regulations consultation response (GOV.UK).