The NHS Pension Scheme Explained: How It Works and What You Get
The NHS Pension is one of the most valuable parts of working in the NHS. Here is how it works, from contributions to the pension you receive.
Updated · 4 min read
Try it with your own numbersNHS Pension Contribution CalculatorThe NHS Pension Scheme is a defined benefit pension. That means it promises you a set level of pension based on your pay and membership, rather than depending on how investments perform. For most NHS staff it is the biggest financial benefit of the job after their salary. This guide explains how it works for staff in England and Wales.
The three parts of the scheme
The scheme has three sections:
- the 1995 section, a final salary scheme for older members
- the 2008 section, another final salary section
- the 2015 scheme, a career average scheme
Since 1 April 2022, every active member builds pension in the 2015 scheme. Many members also have earlier benefits in the 1995 or 2008 sections, which stay in their record. Service between 2015 and 2022 may be covered by the McCloud remedy, which gives some members a choice at retirement.
How the 2015 scheme builds your pension
The 2015 scheme is a career average revalued earnings scheme:
- Each year, you earn 1/54th of your pensionable pay as pension. On £32,073, that is £594 of yearly pension added for that year.
- That amount is increased every year while you are a member, in line with inflation (CPI) plus 1.5%.
- At retirement, all the yearly amounts are added together to make your pension.
Because each year counts on its own, part-time years, pay rises and breaks are all reflected fairly.
What you pay in
Your contribution rate depends on your pensionable pay. For 2026/27 the tiers run from 5.2% to 12.5%:
| Pensionable pay | Contribution rate |
|---|---|
| Up to £13,259 | 5.2% |
| £13,260 to £28,854 | 6.5% |
| £28,855 to £35,155 | 8.3% |
| £35,156 to £52,778 | 9.8% |
| £52,779 to £67,668 | 10.7% |
| Over £67,668 | 12.5% |
Contributions come off your pay before tax, so you get tax relief straight away. For a basic rate taxpayer, each £1 of contribution costs about 80p. The pension contributions calculator shows your tier and monthly cost.
What your employer pays
Your employer pays 23.7% of your pensionable pay on top of your own contribution. For a Band 5 at entry, that is about £7,600 a year. You lose this if you opt out of the scheme.
When can you take your pension?
- Normal pension age in the 2015 scheme is your State Pension age, or 65 if later. You get your full pension from then.
- Early retirement is possible from age 55 (rising to 57 from April 2028), with a reduction for early payment.
- Partial retirement lets you take some of your pension while you keep working, if you reduce your pay by at least 10%.
- Ill-health retirement can pay your pension early without a reduction. See our ill-health retirement guide.
Lump sums
In the 2015 scheme, you can give up some of your yearly pension for a tax-free lump sum, at a rate of £12 of lump sum for each £1 of pension given up. The 1995 section includes an automatic lump sum of three times the pension. The pension lump sum calculator shows the trade-off.
Protection for your family
While you are an active member, the scheme provides:
- a death in service lump sum, normally twice your pensionable pay
- survivor pensions for a spouse, civil partner or qualifying partner
- children's pensions for eligible children
Keep your nomination for the lump sum up to date through the member portal.
How much will I get?
It depends on your pay over your career. As a rough illustration, someone earning around £35,000 a year for 30 years would build about 30 × £35,000 ÷ 54, roughly £19,400 a year in today's money before revaluation, payable for life and rising with inflation. Your annual benefit statement shows your own figures. The pension retirement calculator projects your future pension.
Common questions
Is the NHS Pension worth it? For most people, yes, because of the employer contribution, the guaranteed inflation-linked income and the family protection. Read our guide to opting out of the NHS Pension before deciding otherwise.
What happens if I leave the NHS? Your pension stays in the scheme. See leaving the NHS Pension.
Do bank staff get the pension? Bank workers can usually join the scheme for their bank work.
Your annual benefit statement and the member portal
NHS Pensions provides an annual benefit statement through its online member portal. It shows:
- the pension you have built up so far in each section
- an estimate of your pension at normal pension age
- your membership history and pensionable pay records
It is worth checking once a year. Payroll errors, missing years of membership or the wrong pay figures are much easier to fix soon after they happen than at retirement.
Common mistakes to avoid
- Opting out without seeing the full cost. You lose the 23.7% employer contribution and death in service cover.
- Ignoring old service. Earlier membership in the 1995 or 2008 sections can be valuable. Make sure it appears on your record.
- Not updating your nomination after marriage, separation or a new partner.
- Assuming part-time years do not count. They do, in proportion to your actual pay.
Check your contributions
Use the pension contributions calculator to see your tier and what you pay each month.
This guide explains the general rules for staff in England using 2026/27 figures. It is not financial advice. Your employer, payslip or NHS Pensions statement has the final word on your own pay.