How does the NHS pension scheme work? And how is it calculated?
- September 24, 2024
The NHS pension scheme (2015) is a defined benefit pension plan, which means it guarantees a certain level of retirement income based on your salary and length of service.
It is considered one of the best pension schemes in the UK, offering long-term financial security and peace of mind for healthcare professionals, including doctors, consultants, nurses, and other NHS staff.
The 2015 Scheme is a Career Average Revalued Earnings (CARE) scheme. This is a form of defined benefit pension scheme, which means you get a guaranteed level of benefit at retirement payable according to a fixed formula. Pension benefits for all members are calculated using the same method and revaluation rate.
Key Features of the NHS Pension Scheme:
- Employer Contributions: The NHS contributes a significant portion to your pension, making it a valuable part of your overall compensation package.
- Lump-Sum Option: Upon retirement, you can choose to take part of your pension as a lump sum, which is tax-free up to a certain limit.
How Is the NHS Pension Calculated?
The way your NHS pension is calculated depends on which section of the NHS pension scheme you are a part of. There are three main sections:
The amount of pension you earn each year is determined by what is known as the ‘build-up rate’ which is usually shown as a fraction of your pensionable earnings. In this Scheme the build-up rate is 1/54th, so you earn a pension each year of 1/54th of your pensionable earnings.
For example, if you earn £18,000 in a year you would earn a pension for that year of 1/54th of £18,000, which is £333 (rounded down for illustration purposes only). This is the pension you would build up for that year
Your pension earned each year will be increased each year by a rate, known as ‘revaluation’, in the period before you retire or leave. In this Scheme the revaluation rate is determined by Treasury Orders plus 1.5% each year. Treasury Orders are the method by which the Treasury notifies the value of the change to be applied as part of revaluation
- 2015 Scheme (Career Average Revalued Earnings or CARE Scheme)
- This scheme calculates your pension based on your average earnings throughout your NHS career rather than your final salary.
- Each year, a portion of your salary is added to your pension pot, and it’s revalued with inflation annually.
- Formula: Pension = (Annual earnings x Accrual rate) + Previous years’ pension
- Example: If you earn £60,000 in a year and the accrual rate is 1/54, then:
- £60,000 ÷ 54 = £1,111 added to your pension pot for that year.
Retirement Age and Pension Benefits
- In the 2015 scheme, it aligns with your state pension age or the age of 65.
- You can continue to build up pension rights in this Scheme until age 75 with no limit to the number of years’ pensionable earnings that can be taken into account.
- This Scheme offers flexibility around retirement and you can choose to take part or all of your benefits between ages 55 and 75.
International doctors who work in the NHS will typically be placed in the 2015 scheme, although transfers from previous overseas pension schemes may be possible.
Costs and contributions
The cost of providing the NHS Pension Scheme is shared between members and employers. As a member you pay a contribution towards your pension based upon your pensionable earnings; the more you earn, the higher your contribution rate may be. Employers pay the rest.
Additional Benefits of the NHS Pension Scheme
- Death in Service Benefits: Should something happen to you while working for the NHS, your dependents could receive a lump sum and a pension.
- Ill-Health Retirement: If you are unable to work due to illness, the NHS pension scheme offers an early retirement option with pension benefits.
- Employer Contributions: The NHS will contribute up to 23.7% of your pensionable pay, which is a significant boost to your retirement savings.
- Reduce the amount of tax you pay: Pension contributions are taken from your pay before tax so you receive tax relief on any amount you pay. This can reduce the net amount that you pay depending on your contribution rate, earnings level and personal rate of tax
Why the NHS Pension Scheme Is Attractive to International Doctors
- Financial Security: As an international doctor, securing a long-term financial future is essential. The NHS pension scheme ensures a stable income upon retirement, allowing you to focus on your career and patients.
- Higher Employer Contributions: Few employers in the UK contribute as much as the NHS does toward pensions, making this a valuable benefit for those seeking NHS jobs.
- Guaranteed Benefits: Unlike many private pension schemes, the NHS pension is guaranteed. You will know exactly what to expect at retirement, regardless of market fluctuations.
- Work-Life Balance: NHS jobs come with excellent work-life balance, and the pension scheme is an added benefit to ensure your retirement is equally fulfilling.
The NHS pension scheme is one of the best retirement options available for medical professionals in the UK, offering a defined benefit plan that guarantees financial security. For international doctors interested in NHS jobs, this pension scheme is a huge perk.
Whether you are planning to work as a consultant or a junior doctor, the NHS ensures your retirement will be taken care of.
If you are considering a medical career in the UK, the NHS pension scheme is just one of the many reasons why the UK remains a top choice for international doctors.
Read more useful articles on finding an NHS trust doctor job, pay scales & doctor’s salaries in the UK, relocation and much more!
Relevant Jobs
An NHS hospital in London is looking for a Locum Consultant in Medical Oncology with an interest in GI and Lung malignancies. The Oncology department comprises a team of 16 Consultant Oncologists and is supported by a multidisciplinary team of nurses, pharmacists, and radiographers. This Medical Oncology job is open to both international applications and UK-based doctors, though those with European Specialist registration or MRCP qualifications are most encouraged to apply.
Anyone requiring portfolio support (formally known as CESR) can have their required support discussed on a case-by-case basis.
JOB REQUIREMENTS AND DETAILS
Applicants should have full GMC registration, MRCP (or equivalent), and substantial experience in Medical Oncology. Interest in Lung and GI malignancies is essential. The salary will be between £105,504- £139,882 dependent on experience.
CORE DUTIES OF THIS ROLE
- Provide specialist care for Breast and Lower GI cancer patients, including outpatient and radiotherapy services.
- Actively participate in multidisciplinary team meetings for Lung and GI malignancies.
- Engage in research, clinical audits, and teaching activities to support professional development.
- Contribute to the Acute Oncology Service (AOS) and provide clinical supervision for junior medical staff.
LIFE IN LONDON
London offers a dynamic and diverse environment with a mix of bustling urban areas and quieter suburban neighborhoods. It provides access to world-class educational institutions, excellent transport links, and a wide range of cultural, leisure, and historical attractions. London’s rich history and multicultural vibrancy make it an ideal location for both professional development and personal fulfillment.
HOW WILL IMG CONNECT SUPPORT YOU?
When applying with IMG Connect, you’ll have the full support of an expert recruitment team who will be your recruitment and relocation partners throughout the process. We\'ll support you with:
- CV preparation with a bespoke session with one of our specialists.
- Application support with expert knowledge of NHS specialisms and recruitment practices.
- At least two video-calling interview preparation sessions.
- Contract and offer negotiations for salary, relocation packages, tenure, and more.
Once you have accepted your new role, you’ll then be supported and guided throughout by one of our dedicated relocation executives, including:
- Document gathering and checking.
- COS and visa application support if applicable.
- Assistance with sourcing short- and long-term accommodation.
- Travel arrangements.
- Family support for finding schools and other aspects of pastoral care.
Cellular Pathology Services
The Cellular and Anatomical Pathology Department encompasses histopathology, cytopathology, neuropathology, and anatomical pathology. Annually, it processes approximately 38,000 surgical biopsies, 2,000 non-cervical cytology samples, and conducts around 1,100 postmortem examinations.
The department is staffed by a multidisciplinary team, including consultant pathologists, biomedical scientists, and technical specialists. Services provided involve diagnostic evaluations of tissue samples to identify diseases such as cancer and precancerous conditions, utilizing techniques like special stains, immunocytochemistry, electron microscopy, and molecular methods. The department\'s facilities are equipped to deliver timely and accurate diagnoses, with most straightforward biopsies reported within 14 working days.
Eligibility
Working arrangements can be discussed openly, with an understanding that flexible working and full off-site reporting is accepted and offered for those requiring so, and with specialist registration NHS consultant experience are invited to apply.
A UK-based NHS hospital is looking for a Specialty Doctor in Acute Medicine with an interest in general medicine. The department comprises a team of consultants and middle-grade doctors, all working together to provide high-quality care to patients. This Acute Medicine role is open to both international applications and UK-based doctors, though those with MRCP or equivalent qualifications and those within 6 months of CCT are most encouraged to apply.
Anyone requiring portfolio support (formally known as CESR) can have their required support discussed on a case-by-case basis.
JOB REQUIREMENTS AND DETAILS
Candidates must be fully registered with the GMC and possess MRCP or equivalent qualifications. Entry on the Specialist Register or within six months of CCT at the time of interview is essential. Expertise in a broad range of medical conditions and the ability to lead a multi-professional team is required. Sub-specialty interests will be supported. The salary will be competitive and dependent on experience or grade.
CORE DUTIES OF THIS ROLE
- Lead and manage patients in the Acute Medical Unit and related wards.
- Supervise and mentor junior medical staff.
- Provide consultant support as part of the general medicine on-call rota.
- Contribute to clinical governance, audit, and quality improvement initiatives.
LIFE IN THE REGION
This hospital is located in a well-connected town offering both city and rural living. With excellent schools, public transport options, and numerous leisure activities, it\'s ideal for both individuals and families. The area is known for its rich history and easy access to outdoor activities, making it a wonderful place to live and work.
A leading NHS Trust in the East Midlands is offering an exciting opportunity for a Consultant in Acute and General Internal Medicine. This role is ideal for doctors passionate about delivering high-quality care within a supportive and dynamic environment. The position is based at a CQC-rated \"Outstanding\" hospital, part of a trust recognized for its exceptional staff engagement and commitment to innovation. The role combines acute and sub-acute care responsibilities with opportunities to develop sub-specialist interests.
The Trust also provides CESR Portfolio Pathway support for international medical graduates (IMGs), facilitating the journey to consultant accreditation in the UK.
What is the NHS Trust like?
This NHS Trust serves a diverse population of over 500,000, providing acute and community care through a network of hospitals and clinics. Known for its collaborative approach, the Trust works closely with local health and social care providers to deliver integrated, patient-centered services.
The Trust is committed to fostering a culture of excellence, with a focus on diversity, inclusion, and staff wellbeing.
What is the department like?
The GIM department combines acute care expertise with specialty clinics, ensuring comprehensive and patient-focused services. Consultants lead a multidisciplinary team, supported by advanced diagnostic tools and robust training programs.
The team includes specialists in nephrology, geriatrics, and rheumatology, providing a collaborative environment where consultants can develop their expertise while delivering exceptional care. Supported by registrars, SHOs, and F1 doctors, consultants oversee a high volume of admissions—approximately 14,000 unselected medical emergencies annually—ensuring efficient and effective patient management.
Continued Professional Development
The role offers extensive CPD opportunities, including CESR support, specialty training, and leadership development programs. Consultants are encouraged to engage in research, audits, and teaching.
Location
Located in a vibrant region of the East Midlands, this area offers affordable living, excellent schools, and diverse cultural and recreational activities. With strong transport links, it is an ideal base for professionals and families.
Am I eligible for this role?
UK based candidates:
- Experience in Acute & General Internal Medicine
EEA candidates:
- Experience in Acute & General Internal Medicine
- European Specialist Qualification
Non-EEA candidates:
- MRCP
- Experience in Acute & General Internal Medicine
A teaching hospital in Scotland is looking for a Consultant in Cellular Pathology with an interest in gastrointestinal and/or hepatobiliary pathology. The pathology department comprises a team of 15 consultants and is supported by a team of specialty trainees and biomedical scientists. This Cellular Pathology job is open to both international applications and UK-based doctors, though those with European Specialist qualifications or FRCPath are most encouraged to apply.
Anyone requiring portfolio support (formally known as CESR) can have their required support discussed on a case-by-case basis.
JOB REQUIREMENTS AND DETAILS
FRCPath or equivalent and at least five years of training in pathology are required for this role. Anyone with an interest in gastrointestinal and/or hepatobiliary pathology should apply. The salary will be between £107,144 - 142,369, dependent on experience or grade.
CORE DUTIES OF THIS ROLE
- Provide diagnostic histopathology and/or cytopathology services, with a focus on gastrointestinal and hepatobiliary pathology.
- Participate in multidisciplinary team meetings, ensuring quality case discussion and consensus.
- Contribute to the training and supervision of pathology trainees and biomedical staff.
- Engage in continuous service improvement and audit activities to maintain high-quality standards.
LIFE IN SCOTLAND
This hospital is located in a vibrant city by a major river, offering a mix of urban and rural living. Popular areas for living include both lively city neighborhoods and tranquil countryside settings.
The region boasts excellent schools, convenient transport links to major cities, and leisure activities including hiking, cycling, and cultural venues like museums and concert halls.
Historically, this area has been a center for innovation, with a strong reputation for industries ranging from life sciences to creative technology.
HOW WILL IMG CONNECT SUPPORT YOU?
When applying with IMG Connect you’ll have the full support of an expert recruitment team who will be your recruitment and relocation partners throughout the process. We\'ll support you with:
- CV Preparation with a bespoke session with one of our specialists
- Application support with expert knowledge of NHS specialisms & recruitment practice
- At least two video calling interview preparation sessions
- Contract and offer negotiations for salary, relocation packages, tenure and more
- Once you have accepted your new role, you’ll then be supported and led throughout by one of our dedicated relocation executives who will guide you through all the way to starting to your new role including:
- Document gathering and checking
- COS and Visa Application support if applicable
- Support sourcing short- and long-term accommodation
- Travel Arrangements
- Family support for finding schools and any other aspects of pastoral care