NHS Pension Guide 2025
How the NHS pension works for nurses: contribution rates, benefits, retirement age and what you need to know.
Overview of the NHS Pension Scheme
The NHS Pension Scheme is one of the largest and most valuable defined benefit pension schemes in the UK. If you work for the NHS under Agenda for Change (or in a pensionable post), you can choose to join. Your contributions are deducted from your pay, and in return you build up a guaranteed pension for retirement, with the NHS contributing significantly on your behalf.
Most nurses in permanent or fixed-term NHS employment are eligible. Agency staff employed through an agency are not in the NHS scheme for that work, though some agency workers may be enrolled if they have a separate NHS contract. This guide focuses on direct NHS employment.
Which Scheme Am I In?
If you joined the NHS for the first time on or after 1 April 2015, you are in the "2015 NHS Pension Scheme". If you had continuous membership before that, you may have been moved into the 2015 scheme in 2022 under the "McCloud" remedy, or you may have protection — the exact position depends on your age and membership history. Your annual benefit statement and the NHS Business Services Authority (NHSBSA) pension service can confirm which scheme applies to you.
The 2015 scheme is a "CARE" (career average revalued earnings) scheme: each year you build up a slice of pension based on that year's pensionable pay, which is then revalued each year until retirement. The result is a pension that reflects your career earnings rather than just your final salary.
Contribution Rates 2025/26
Your contribution rate is based on your pensionable pay in tiers. Pensionable pay generally includes your basic salary and some allowances, but not all elements (e.g. overtime and some supplements may be treated differently). The following tier structure gives an idea of how much you pay; exact tiers are set by the scheme and updated annually.
In 2025/26, contribution tiers typically range from around 5.0% for the lowest pensionable pay to 14.5% for the highest. A nurse on a Band 5 or Band 6 full-time salary will often be in the 7–10% range. Your payslip will show your exact percentage and deduction.
The employer also pays contributions — currently 20.9% of pensionable pay — which is why the scheme is often described as very valuable: you get a large employer input and a guaranteed benefit, not dependent on stock market performance.
What You Build Up
Each year you earn a portion of your pensionable pay (1/54th in the 2015 scheme) as pension. That slice is revalued each year in line with a set measure (e.g. CPI + 1.25% in recent years), so it keeps pace with inflation. At retirement you receive a pension for life based on the total of all these slices, plus the option to take a tax-free lump sum by giving up some pension.
The scheme also provides valuable benefits if you die in service or leave due to ill health, including life assurance and dependants' pensions. Exact details are in the scheme regulations and on the NHS Pensions website.
Retirement Age
In the 2015 scheme, your normal pension age is the same as your state pension age (currently 66, scheduled to rise to 67 and then 68). You can take your pension before normal pension age, but it will be reduced to reflect early payment. You can also delay taking it and receive a higher pension when you do.
Planning when to retire is a personal and financial decision. The earlier you take your pension, the lower the annual amount; the longer you wait (up to the scheme rules), the higher it is.
Opting Out and Rejoining
You can opt out of the scheme at any time. If you opt out, you stop building new benefits and your take-home pay goes up because no pension contributions are taken. Your existing built-up benefits are preserved and will be paid when you reach pension age (or transferred if you move to another scheme).
Many people consider opting out when budgets are tight, but it can mean giving up a lot of long-term value. If you are thinking about it, it is worth getting regulated financial advice or using the scheme's modellers to see the impact. You can rejoin the scheme later if you are still in pensionable employment.
Tax and Allowances
Pension contributions from your pay usually receive tax relief at your marginal rate — so the cost to you is less than the headline percentage. Very high earners may be subject to the annual allowance or tapered annual allowance, which can create a tax charge if pension growth in a year exceeds the allowance. This is more relevant to higher bands and those with long service; your annual statement and a financial adviser can help if you are affected.