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
Eligibility for these roles:
- Specialist Registration in Histopathology with the GMC - this is essential and candidates cannot be considered without this.
- Strong experience reporting histology in one or multiple organ systems
A leading NHS cancer center in Manchester is looking for a Consultant Clinical Oncologist specializing in Breast Oncology with an interest in advanced radiotherapy treatments in particular. Candidates can work as either a clinical or radiation oncologist. The Clinical Oncology Breast Disease Group comprises a team of 10 consultants, supported by a multidisciplinary team of nurse clinicians, clinical fellows, specialist trainees, pharmacists, and research nurses. This role is open to both international and UK-based doctors, though those with GMC Specialist Registration or FRCR 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
Whilst specialist registration is not required, it is a preferred status for those interested in staying longer term given the opportunity to turn the post into a substantive role. Whatever the qualifications or registration type, candidates should have significant experience in the provision of radiotherapy for breast oncology patients. The salary will range from £105k to £139k per annum, dependent on experience.
CORE DUTIES OF THIS ROLE
- Deliver comprehensive clinical services for Breast Oncology patients, including radiotherapy and systemic therapies.
- Participate actively in multidisciplinary team meetings, including remote attendance of the North Manchester General Hospital MDT.
- Contribute to the team’s robust research portfolio, including advanced radiotherapy and systemic therapy trials.
- Participate in the department’s on-call rota, with a 1:20 frequency, covering patient consultations and reviews.
LIFE IN MANCHESTER
Manchester, a thriving city in the North West of England, offers a mix of urban vibrancy and nearby rural tranquility. Popular areas include the city center for urban living and the nearby Cheshire countryside for more relaxed, family-oriented lifestyles. The region boasts excellent schools, extensive transport links including Manchester International Airport, and a wealth of cultural, sporting, and leisure activities. Manchester\'s industrial heritage has shaped the city into a hub of innovation and culture, renowned globally for its contributions to music, sports, and science.
Anyone requiring portfolio support (formally known as CESR) can have their required support discussed on a case by case basis.
JOB REQUIREMENTS AND DETAILS
Full GMC registration and a license to practice with experience in Radiotherapy and chemotherapy are required for this role, and anyone with an interest in Gynaecology and Upper GI Oncology should apply. The salary will be between £88,364 and £119,133 dependent on experience or grade.
CORE DUTIES OF THIS ROLE
- Provide a comprehensive Oncology service and expertise in the management of site specialist cancer services.
- Collaborate with the multidisciplinary teams to develop and support Oncology services.
- Supervise and manage junior medical staff, including supporting the service during colleagues\' leave.
- Undertake teaching, clinical audit, and research, contributing to local and national postgraduate education.
LIFE IN THE NORTH WEST
The hospital is based in the North West of England, with the closest urban areas offering a range of living options from city life to more rural surroundings.
The region boasts excellent schools and transport links, with trains connecting to major UK cities, and plenty of leisure activities for adults and families, including access to outdoor activities and historic landmarks.
The North West has significant historical importance and features stunning landscapes, making it a desirable location to live and work.
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
A NHS district general hospital in the South West is looking for a Consultant Histopathologist with an interest in bowel cancer screening. The histopathology department comprises a team of five consultants and is supported by a large team of middle-grade doctors. This histopathology job is open to both international applications and UK-based doctors, though those with European Specialist or FRCPath 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 hold full GMC registration, FRCPath or equivalent qualifications, and have at least three years of higher training. Those with an interest in bowel cancer screening are encouraged to apply. The salary will be between £99,532 and £131,964 per annum, dependent on experience or grade.
CORE DUTIES OF THIS ROLE
- Provide a comprehensive histopathology and cytopathology reporting service, including work from the bowel cancer screening programme.
- Participate in post mortem services, including coroner’s cases.
- Attend and present cases at multidisciplinary meetings.
- Contribute to the department\'s clinical governance and medical audit processes.
LIFE IN THE SOUTH WEST
The hospital is located in a coastal region, with popular residential options in both urban and rural settings. The area offers excellent schools, transport links, and leisure activities, from beach sports to countryside hikes. Historically, the region is known for its significant tourist draw due to the beautiful coastal landscape and maritime history.
HOW WILL IMG CONNECT SUPPORT YOUR APPLICATION?
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
- Short- and long-term accommodation sourcing
- Travel Arrangements
- Family support for finding schools and any other aspects of pastoral care
An excellent NHS job opportunity for an experienced Consultant in Emergency Medicine to join a UK-based NHS Trust. This role provides CESR Portfolio Pathway support, and international applications from IMGs are welcome.
What is the NHS Trust like?
This NHS Trust provides high-quality hospital and community care to its local population and visitors. The Trust operates multiple acute and community hospitals across the region, offering a comprehensive range of medical services. The Trust has received high ratings from the Care Quality Commission for its care and effectiveness. The Emergency Departments within the Trust provide round-the-clock services, backed by a full range of diagnostic and therapy options.
What is the department & team like?
The Emergency Medicine department is a vital part of the Trust’s Urgent Care Division. The department is well-equipped with modern facilities, including advanced radiology services and electronic health record systems. The team is composed of experienced consultants, doctors, and nursing staff, providing continuous coverage and comprehensive care. The department also includes specialized teams for psychiatric and rehabilitative care, ensuring holistic treatment for all patients.
Continued Professional Development
This NHS job offers further training and accreditation within Emergency Medicine, including CESR Portfolio Pathway Support and access to specialty training. The department supports the development of sub-specialist interests and offers opportunities for research, teaching, and clinical governance. The role is designed to support professional growth and career progression.
What is area like?
This region in the UK offers a compelling lifestyle for international doctors and their families. With affordable living costs, beautiful natural surroundings, and excellent educational institutions, it is an ideal location for relocation. The area is well-connected, with easy access to major cities, and offers a rich cultural experience with a diverse population and various recreational activities.
ARE YOU ELIGIBLE FOR THIS ROLE?
EEA Candidates:
- Experience of working in Emergency Medicine
- Board Certified Specialist in Emergency Medicine
Non-EEA Candidates:
- MRCEM UK
- Experience of working in Emergency Medicine
UK based applicants
- Experience of working in Emergency Medicine
- Within 6 - 12 months of completing CCT