NHS Pension Changes – What’s Going On?

NHS Pension changes

Dear Aussie Doc,

I’m a UK trained doctor now in Australia.  I received a letter talking about the NHS pension changes and a public consultation.  The pension scheme is so complicated!  What is going on and what should I do?

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NHS Pension changes

Hi Doc, 

I had a fascinating read of the 70 page intended NHS pension changes document! 

The NHS pensions were changed to reduce costs associated with the generous % of final salary scheme.  The new scheme introduced used a % of average salary over years worked, with the claim that this would improve the pension for lower income earners. 

The NHS excluded those within 10 years of pension age at the time (to their relief I imagine!)  But here’s the thing – this has now been agreed to be age discrimination against younger workers.

The UK government have now committed to setting this right.  They intend to offer those working in the NHS between 2015 and 2022 an option of the old “legacy” pension or the new one for the years affected.

After 2022 all NHS pensions will be the new version.   

The legacy pension is likely to be advantageous for those whose salaries increased significantly between 2015 and 2022.  But there are other differences in benefits proposed  which will be worth comparing.  Tax liability also needs to be considered, especially for those earning more than 110,000 GBP.  

It is even proposed that members can make a choice within 12 months of the options being offered, or wait until retirement age.  So there is no need to panic.  When the detailed deal is released, it will be time to analyse the details.  Waiting for retirement to make that choice may help you ensure you are selecting the best option.  

The NHS pension is still a good deal, but it looks like a bit of old fashioned generosity on on it’s way back to some members. 

This UK site has some useful information on the NHS pension too,

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