Changes to NHS Pension Scheme Contributions
From 1st October 2022 NHS Member contributions to the pension scheme will be changing due to the February 2022 public consultation. These were in 7 bands, however will now be split into 11 bands.
Member contribution Rates
| Annualised Pensionable Income | Contribution rate to 30th September 2022 Based on full time equivalent pensionable pay | Phase 1 – Contribution rate from 1st October 2022 based on actual pensionable pay | Phase 2 – Contribution rate based on actual pensionable pay, date to be confirmed |
| Up to £13,231 | 5% | 5.1% | 5.2% |
| £13,323 to £15,431 | 5% | 5.7% | 6.5% |
| £15,432 to £21,478 | 5.6% | 6.1% | 6.5% |
| £21,479 to £22,548 | 7.1% | 6.8% | 6.5% |
| £22,549 to £26,823 | 7.1% | 7.7% | 8.3% |
| £26,824 to £27,779 | 9.3% | 8.8% | 8.3% |
| £27,780 to £42,120 | 9.3% | 9.8% | 9.8% |
| £42,121 to £47,845 | 9.3% | 10.0% | 10.7% |
| £47,846 to £54,763 | 12.5% | 11.6% | 10.7% |
| £54,764 to £70,630 | 12.5% | 12.5% | 12.5% |
| £70,631 to £111,376 | 13.5% | 13.5% | 12.5% |
| £111,377 and above | 14.5% | 13.5% | 12.5% |
There will be a further change to Phase 2 contributions rates in 2023, however the date for this has not yet been confirmed.
The employer contribution will remain at the total of 20.68%, with 14.38% of the employee’s pensionable pay being shown as an employer contribution through payroll.
The full breakdown is 14.3% employer contribution, 0.08% Scheme Administration Levy and the remaining 6.3% being funded centrally.
It’s important to note that:
- From 1 October 2022, many part-time employees will be contributing less to the pension scheme. This is due to the fact that contribution rates will be determined by an employee’s actual yearly income rather than what they would have earned had they worked full time.
- Monthly pension contribution changes and the associated changes to income tax may have a direct effect on take-home pay.
Tax relief
Members of the NHS Pension Scheme are eligible for tax relief on their pension contributions up to a specific amount. This is because contributions are taken from pay before tax is taken off, therefore contributions reduce the amount of pay subject to tax.
The annual and lifetime allowances, which are restrictions imposed by HMRC, means that the tax relief available for pensions savings is subject to certain limits.
GP Solo form
For NHS organisations who engage a GP on a self employed contract for services arrangements, then a new GP Solo form is available from 1 October 2022 following the change in contributions. You can read more about this here.
This article was written by Price Bailey’s Payroll team. If you have a query regarding anything mentioned in this article, please contact a member of the Payroll team below.
We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.