Pensions
Start planning now for a long and enjoyable retirement.
The RCN is committed to working to ensure members have equitable access to good quality, sustainable pension provision.
There are three main types of pension provision:
- state pension: when you are working, your National Insurance contributions are counted towards your future state pension entitlement
- occupational pension: depending on where you work, different occupational pension options are also available to help you save for your retirement, for example, the NHS pension
- private pension: from a bank or other financial provider.
This information cannot be used as advice on any course of action to take, or not to take. We recommend that you take independent financial advice on your retirement planning needs and arrangements. This may include using the services of .
Proposed Introduction of Flexible Pension Contributions in the NHS Pension Scheme
The RCN is committed to ensuring fair and flexible options for NHS staff when it comes to planning for their financial future. We are therefore engaging with proposals to introduce flexible pension contributions within the NHS Pension Scheme.
This proposal aims to provide more tailored contribution options for scheme members, enabling them to remain part of the pension scheme while adjusting their contributions to better suit their financial circumstances.
What Are Flexible Pension Contributions?
Flexible pension contributions would allow members to reduce their monthly contributions to the NHS Pension Scheme while still retaining access to essential scheme benefits, such as life assurance and ill-health retirement cover.
This means members could:
- continue building their pension pot, albeit at a reduced rate
- avoid the financial strain of paying the full contribution rate during challenging periods
- stay within the scheme and avoid losing valuable benefits that are not available outside the NHS Pension Scheme.
How Would This Work?
If introduced, the proposal could allow members to:
- select a lower contribution tier (for example, 50% of the full rate)
- accrue pension benefits proportionally to their reduced contributions
- revert to the standard contribution level when circumstances improve.
This flexibility is already seen in other public sector schemes and is being explored as a way to support NHS staff while maintaining the sustainability of the NHS Pension Scheme.
The RCNÃÛÌÒÖ±²¥™s role in shaping the proposal
The RCN is actively involved in discussions on this proposal, working to ensure the interests of nursing staff are represented. We are advocating for:
- clear, simple options that are easy to understand and access
- protections for members who need to reduce contributions, ensuring they do not lose critical benefits
- sufficient communication and support to help members make informed choices.
Other activity
The Department for Health and Social Care (DHSC) consulted on a variety of changes to the NHS pension scheme and published their response in February 2024. Here is a summary:
Contribution changes
- The RCN has been working with DHSC on reducing the potential for 'cliff edge' scenarios (predominantly for members in Wales), where pay awards push members into higher pension contribution brackets, causing pension arrears. DHSC has agreed to amend the uplift mechanism from April 2024 in line with CPI inflation measured in the previous September. To ensure that most members are protected against drifting into paying higher contributions, DHSC will apply a ÃÛÌÒÖ±²¥˜better ofÃÛÌÒÖ±²¥™ test and further increase these thresholds in line with the Agenda for Change pay award in England if that is higher than CPI. The upper threshold for the first tier will not be increased by either method, as is the case now.
- DHSC consulted on freezing the entry threshold to the top tier, effectively resulting in a reduction in payments for the highest earners. Also, DHSC proposed abolishing the lowest tier, thereby increasing contributions for the lowest earners before the newly agreed tax relief was applied. However, DHSC accepted RCN's arguments that this was not conducive to overall scheme sustainability and neither proposal will be implemented.
- The real-time rebanding payroll approach will not proceed at this point. There will be a further consultation to explore the lower-level detail.
- Implementation of the new employer contribution rate of 23.7%, plus the existing 0.08% scheme administration charge.
Other changes
- Permanent removal of the pension abatement rules for special class members.
- Amendment of the 2015 Scheme definition of overtime to provide that additional hours worked by members up to full-time are pensionable, except where a member has taken partial retirement in the preceding 12 months.
- Extension of eligibility for partial retirement to 1995 Section members who have reached maximum pensionable service.
- The effect of salary sacrifice arrangements on pensionable pay will be disregarded for partial retirement purposes.
- Members who take unpaid carerÃÛÌÒÖ±²¥™s leave will be treated as having continued in pensionable service during the time that they are absent from work.
Read the .
Please see our guidance on the NHS pension scheme for information on:
- auto enrolment (including bank staff)
- ill-health retirement
- partial retirement
- special class status
- widening access and Fair Deal.
You can also find advice on age discrimination in reformed public service pension schemes - including the NHS Pension Scheme (sometimes called 'the McCloud judgment').
This is a way of saving for your retirement thatÃÛÌÒÖ±²¥™s arranged by your employer. Normally both you and your employer make contributions to the scheme. The money paid into the pension scheme is used to pay you an income after retirement.
Please visit for more information on workplace and personal pensions.
Further information regarding your specific occupational pension can be obtained from your employer's payroll or human resources department. If you work for a Local Authority you should have access to the. University staff may be covered by the .
Many occupational pension schemes make provision for employees who leave work early due to redundancy or ill-health and also pay life assurance benefits. Employers should provide specific guidance on these matters.
Auto-enrolment
Employers must offer a workplace pension to eligible staff. Staff are automatically enrolled into the scheme but can subsequently opt out if they wish to. Both employers and staff pay into the scheme and staff receive tax relief on their contributions. This is in addition to any state pension retirement benefit.
Employers can choose any scheme that meets the necessary criteria and employees can opt out of the auto-enrolled pension provision.
For more information on your specific occupational or workplace pension, speak to your manager or your employer's payroll or human resources department.
Visit for more information on workplace and personal pensions and auto-enrolment.
Occupational pension and taxation
Contributions made into occupational pension schemes are usually exempted from income tax (up to HMRC limits), i.e. they are paid from salary before tax is calculated and deducted. However, once they are in payment, such pensions are taxed as any other income would be according to the current tax thresholds.
High earners and those with large pension pots need to be aware of particular aspects of pension taxation. For more information, please see .
Please see our advice guide on the state pension which outlines current issues relating to the equalisation of the state pension age between men and women, including details of a campaign led by the Women Against State Pension Increases.
Private pensions are like workplace pensions but are set up by you personally, rather than your employer. You can set up regular contributions, for example monthly, or make one-off payments into your fund. Your pension provider will add any necessary tax relief.
The money you put into your personal pension will usually be invested in a range of assets like shares, bonds, property and cash. When you start your pension, you'll probably get a choice of pension funds to select from, based on how much risk you are willing to take.
When you reach the age of 55, you can take your private pension as a lump sum, use it to buy an annuity (a guaranteed income) or leave it invested and take out cash amounts when you need to via drawdown.
If you need financial advice, please see below.
In the first instance, any problems relating to your pension should be directed to your pension provider or the if your query relates to the state pension.
Many secondary sources of advice and/or support are only able to once you have exhausted your own pension providerÃÛÌÒÖ±²¥™s dispute resolution process. Please see the additional resources section below for more information.
You can find out the current tax position on pension contributions on the .
If you need a pension forecast or have any questions about your pension, please contact your pension provider in the first instance.
If there is a dispute with your employer or pension provider, please contact us.
Independent financial advice
Pensions and retirement planning are both areas that require specialist advice. If you are considering alternative pension arrangements or additional pensions, then you may benefit from talking to . Quilter can provide advice to overseas RCN members provided they are paying UK income tax. Please have your UK National Insurance and RCN membership number ready.
Some companies are singling out pension savers and claiming that they can help them access their pension fund before their minimum pension age without any tax consequences. Promises of early cash are likely to result in serious tax consequences. If you access this type of scheme you are risking tax charges and penalties that could amount to more than half the value of your pension savings. Please be extremely cautious if you are contacted and always seek independent financial advice, never be rushed into making a pension transfer. RCN members can access independent financial advice from .
What to watch out for:
- Websites encouraging visitors to access part of their pension fund immediately by transferring it into a new scheme, these sites are usually fraudulent and cost the UK more than half a billion pounds to date.
- Unsolicited contact over the phone or via text message from companies offering a ÃÛÌÒÖ±²¥˜loanÃÛÌÒÖ±²¥™, ÃÛÌÒÖ±²¥˜saving advanceÃÛÌÒÖ±²¥™ or ÃÛÌÒÖ±²¥˜cash backÃÛÌÒÖ±²¥™ from your pension.
- Advisers or ÃÛÌÒÖ±²¥˜introducersÃÛÌÒÖ±²¥™ offering upfront cash incentives, who may be forceful or insistent on speedy decisions.
- Not being informed about the potential reductions of your pension fund, tax charges and penalties.
- Failure to provide the relevant documentation and information about the transfer, the terms and conditions and how your pension will be paid when you retire.
If you think you have been made a fraudulent offer, you can report this to . Further information is available from and .
This network gives eligible members the opportunity to feed into the important work of the National Pensioners Convention (NPC), which the RCN is affiliated with. The network is made up of RCN members who are over the age of 55 and receive a state or occupational pension. For more information, please see the National Pensioners Convention Network page.
- regulates most firms and individuals that advise, sell and arrange financial products and services. Any financial advisers should be registered with the FCA.
- is widely recognised as a leading source of free information, advice and guidance on company, personal and stakeholder schemes, including the miss-selling of a pension or lost pensions. They can also take on casework where there has been a dispute with a pension provider that may or may not lead to an investigation by the Pensions Ombudsman.
- supervises the pension industry and employers who administer pension schemes.
- investigates complaints and disputes about the way that pension schemes are run, but can only take referrals once a pension scheme's dispute resolution process has been exhausted.
- Pensions and retirement planning are both areas that require specialist advice. If you are considering alternative pension arrangements or additional pensions, then you may benefit from talking to . Quilter can provide advice to overseas RCN members provided they are paying UK income tax. Please have your UK National Insurance and RCN membership number ready.
For more general advice and information you can contact one of the following:
- - for general information on retirement planning and pension provision.
- - search for general advice on workplace and personal pensions.
- - information on government pension and savings scheme.
- - for more information on the NHS Pension scheme in England and Wales.
- - for information on the NHS Pension scheme in Scotland.
- - for information on the NHS Pension in Northern Ireland.
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