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 teaching hospital in Kent is looking for a Consultant in Clinical Oncology with an interest in urology. The Oncology department comprises a team of over 40 Clinical and Medical Oncology consultants and is supported by a large team of middle-grade doctors, fellows, and trainees.
Anyone requiring portfolio support (formally known as CESR) can have their required support discussed on a case-by-case basis.
JOB REQUIREMENTS AND DETAILS
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This Clinical Oncology job is open to both international applications and UK-based doctors, though those with European Specialist qualifications or FRCR are most encouraged to apply.CCT in Clinical Oncology or equivalent experience, including CESR pathway candidates.
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The salary will be between £105,504 and £139,882 dependent on experience or grade.
CORE DUTIES OF THIS ROLE
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Provide high-quality specialist care to melanoma patients attending the Kent Oncology Centre.
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Attend relevant MDT meetings and coordinate treatment planning with other specialists.
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Participate in departmental research initiatives and contribute to national and local clinical trials.
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Contribute to training and supervision of junior doctors and participate in clinical governance activities.
Life in Kent
The area offers the best of both worlds: urban living in towns like Maidstone and Tunbridge Wells, and tranquil countryside villages such as Lenham or Goudhurst.
Kent boasts a wide range of excellent primary and secondary schools, including several grammar schools, and is well connected to London via high-speed rail and road. Residents enjoy easy access to historic castles, the coast, national parks, shopping, and outdoor activities—perfect for both adults and families.
Known as the “Garden of England,” Kent holds historical significance with its Roman heritage, medieval cathedrals, and coastal defense legacy, offering a unique blend of culture and natural beauty.
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:
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CV Preparation with a bespoke session with one of our specialists
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Application support with expert knowledge of NHS specialisms & recruitment practice
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At least two video calling interview preparation sessions
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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 all the way to starting your new role, including:
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Document gathering and checking
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COS and Visa Application support, if applicable
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Support sourcing short- and long-term accommodation
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Travel arrangements
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Family support for finding schools and any other aspects of pastoral care
Anyone requiring portfolio support (formally known as CESR) can have their required support discussed on a case by case basis.
JOB REQUIREMENTS AND DETAILS
This oncology job is open to both international applications and UK-based doctors, though those with European Specialist registration or FRCR are most encouraged to apply.
Anyone with an interest in gynae and upper GI oncology should apply.
The salary will be between £105,504 and £139,882 dependent on experience or grade.
CORE DUTIES OF THIS ROLE
Provide systemic therapy services for patients across UHMB sites.
Participate in multidisciplinary team meetings and support associated administrative duties.
Lead and contribute to acute oncology services across the Trust (no on-call required).
Support teaching, supervision, and mentorship for junior medical staff and trainees.
LIFE IN LANCASHIRE AND SOUTH CUMBRIA
The area is rich with excellent schools, convenient rail and road links, and beautiful scenery for outdoor enthusiasts. Historically, the region has played a key role in British shipbuilding and industrial development and today combines coastal charm with cultural heritage and modern living.
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
An NHS teaching hospital, in Kent is looking for a Consultant in Medical Oncology with an interest in Melanoma. The Oncology department comprises a team of over 40 Clinical and Medical Oncology consultants and is supported by a large team of middle-grade doctors, fellows, and trainees.
Anyone requiring portfolio support (formally known as CESR) can have their required support discussed on a case-by-case basis.
JOB REQUIREMENTS AND DETAILS
-
This Medical Oncology job is open to both international applications and UK-based doctors, though those with European Specialist qualifications or MRCP are most encouraged to apply.CCT in Medical Oncology or equivalent experience, including CESR pathway candidates.
-
The salary will be between £105,504 and £139,882 dependent on experience or grade.
CORE DUTIES OF THIS ROLE
-
Provide high-quality specialist care to melanoma patients attending the Kent Oncology Centre.
-
Attend relevant MDT meetings and coordinate treatment planning with other specialists.
-
Participate in departmental research initiatives and contribute to national and local clinical trials.
-
Contribute to training and supervision of junior doctors and participate in clinical governance activities.
Life in Kent
The area offers the best of both worlds: urban living in towns like Maidstone and Tunbridge Wells, and tranquil countryside villages such as Lenham or Goudhurst.
Kent boasts a wide range of excellent primary and secondary schools, including several grammar schools, and is well connected to London via high-speed rail and road. Residents enjoy easy access to historic castles, the coast, national parks, shopping, and outdoor activities—perfect for both adults and families.
Known as the “Garden of England,” Kent holds historical significance with its Roman heritage, medieval cathedrals, and coastal defense legacy, offering a unique blend of culture and natural beauty.
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 all the way to starting 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
An NHS specialist cancer centre in Lancashire and South Cumbria is looking for a Consultant in Medical Oncology with an interest in upper and lower GI cancers. The oncology department comprises a team of 8 consultants and is supported by a large team of middle grade doctors.
Anyone requiring portfolio support (formally known as CESR) can have their required support discussed on a case by case basis.
JOB REQUIREMENTS AND DETAILS
This oncology job is open to both international applications and UK-based doctors, though those with European Specialist registration or MRCP are most encouraged to apply.
Anyone with an interest in upper and lower GI oncology should apply.
The salary will be between £105,504 and £139,882 dependent on experience or grade.
CORE DUTIES OF THIS ROLE
-
Provide systemic therapy services for patients with upper and lower GI cancers across UHMB sites.
-
Participate in multidisciplinary team meetings for lung and upper GI cancer and support associated administrative duties.
-
Lead and contribute to acute oncology services across the Trust (no on-call required).
-
Support teaching, supervision, and mentorship for junior medical staff and trainees.
LIFE IN LANCASHIRE AND SOUTH CUMBRIA
The area is rich with excellent schools, convenient rail and road links, and beautiful scenery for outdoor enthusiasts. Historically, the region has played a key role in British shipbuilding and industrial development and today combines coastal charm with cultural heritage and modern living.
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
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Anyone requiring portfolio support (formally known as CESR) can have their required support discussed on a case by case basis.
JOB REQUIREMENTS AND DETAILS
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CORE DUTIES OF THIS ROLE
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Deliver acute assessment and treatment to patients at the hospital\'s \"front door\" including the Emergency Department, Clinical Decision Unit, and Same Day Emergency Care.
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Develop and deliver a comprehensive 7-day acute medicine service.
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Provide “hot” clinics and take an active role in reducing hospital admissions.
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Offer effective leadership to multidisciplinary staff and support the development of teaching, training, and research.
LIFE IN WALES
This role is based in a scenic area of Wales, where candidates can enjoy both rural charm and easy access to urban amenities. While some prefer the peaceful villages in the countryside, others choose to live in nearby towns or cities for a livelier pace of life.
The region offers strong school options, convenient transport links across South Wales, and plenty of leisure activities such as hiking, sports, and visiting historic coastal areas—ideal for individuals and families alike.
Known for its rich cultural heritage, the area is steeped in Welsh history and folklore, with deep roots in medieval tradition and legend.
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