NHS Pension Scheme: how it works, what it costs and what you get

The NHS Pension Scheme is a defined benefit (DB) pension, which provides a guaranteed income in retirement based on your pay and how long you have been a member, rather than a pot of money you draw down yourself¹. It is an unfunded public service pension scheme, which means there is no fund of investments set aside: contributions from today's staff and employers pay today's pensions¹.

There are three different sections of the scheme: the 1995 Section, the 2008 Section and the 2015 Section². The 1995 and 2008 Sections pay a final salary pension, while the 2015 Section pays an income based on your career average earnings, which is less generous than the final salary scheme². Some people who were members of the original 1995 or 2008 sections were moved into the 2015 Section on 1 April 2015².

What you pay depends on your pensionable pay. From 1 April 2026 the contribution rates run from 5.2% on pay up to £13,259 to 12.5% on pay of £62,925 and above³. The employer contribution rate is 23.7% as of April 2026².

What the scheme offers

The NHS Pension Scheme is a defined benefit scheme, which means the income you get in retirement is worked out from a formula rather than from how your investments perform. The 1995 and 2008 Sections pay a final salary pension, based on your pay at or near retirement and your length of service². The 2015 Section pays an income based on your career average earnings, which is less generous than the final salary scheme².

Because it is a public service scheme, it sits alongside other public sector arrangements such as the Local Government Pension Scheme and the Civil Service Pension Scheme, though the rules differ between them. The scheme is unfunded, so there is no investment fund backing it in the way a private sector scheme would have¹.

The scheme also provides death-in-service benefits. The government has confirmed that benefits under certain public sector schemes, such as the NHS Pension Scheme, will not be affected by inheritance tax changes⁴. You can nominate who you would like benefits to go to, and there is a separate page on how to nominate a beneficiary.

There is also an NHS Injury Benefit Scheme, which is separate from the main pension. You do not have to have been a member of the NHS pension schemes to make a claim⁵. That scheme will be closed to new injury benefit applications from 31 March 2038⁵.

Contributions: what you pay and what your employer pays

Your contribution rate is tiered by pensionable pay. The rates were set for scheme years 2024/25 to 2027/28, but the pay ranges they apply to changed from 1 April 2025, and then again on 1 April 2026 when the Department of Health and Social Care updated the pensionable pay ranges and contribution percentages³.

Those rates and ranges come from the scheme regulations³. On top of what you pay, the employer contribution rate is 23.7% as of April 2026².

One change worth knowing about if you work part time: from 1 April 2025 the rules on additional hours for part-time staff were changed so that additional hours up to whole time equivalent are automatically pensionable³. That means extra hours you work can count towards your pension without you having to do anything.

If you are comparing this with a workplace pension outside the NHS, the workplace pensions explained page sets out how automatic enrolment schemes work, and workplace pension charges and the charge cap covers what those schemes can charge.

Retirement ages and taking your pension

When you can take your NHS pension depends on which section you are in. The 1995 Section has a normal pension age of 60, the 2008 Section 65, and the 2015 Section your State Pension age². You can check what your State Pension age is on the State Pension age page.

You can retire early and claim your pension once you reach the minimum pension age of 55². Claiming before your normal pension age means the pension is reduced, because it is expected to be paid for longer. The reduction depends on how early you take it and which section you are in.

If you are thinking about retiring early because of ill health, there is separate guidance on taking your pension early because of ill health. NHS Scotland has its own arrangements for members who are ill or injured⁵, and there is a page on the NHS Scotland Pension Scheme for members north of the border.

NHS Scotland pensions increased by 3.8% from 6 April 2026⁵. Pensioners in Scotland can access their P60 for the financial year 2025/26 on Online services from May 2026⁵.

Transfers: why most NHS pension money cannot move

In most cases you cannot transfer NHS pension benefits into a defined contribution (DC) arrangement such as a SIPP, personal pension or workplace pension¹. Legislation prevents transfers of these DB benefits into DC schemes¹.

There is a limited exception if you leave the scheme with less than two years' qualifying membership¹. In that situation, depending on scheme rules, you may be offered a refund of your own contributions less tax, or the option to transfer a cash equivalent value of your pension rights to another scheme, which could include a SIPP¹.

If you are considering a transfer, the general process for moving a pension is set out by the Financial Conduct Authority. To transfer your pension, you usually need to check your current scheme allows transfers out, make sure you will not lose any benefits, decide which scheme to transfer into, check if you need to pay for financial advice, ask your current provider for a transfer value, and ask the new scheme to start the transfer⁶.

Your new scheme provider must be either a public service pension scheme, an authorised master trust, or a collective defined contribution scheme, or be on The Pensions Regulator's pre-approved list⁷. You will need to give your new provider's name and address, HMRC registration number, payment details, type of scheme and the identity of the scheme administrator⁷.

The Pension Schemes Act 2021 was introduced to protect members from pension scams by helping trustees of occupational pension schemes ensure transfers of pension savings are made to safe and not fraudulent schemes⁸. There is more on the warning signs on the pension scams page, and on the rules about when advice is required on the transfer advice rule page.

Annual allowance and tax

The NHS Pension Scheme counts towards your annual allowance, but not in the way you might expect. For the NHS Pension Scheme it is the pension input amount, the increase in the value of your promised pension over the year under HMRC rules, that counts towards the annual allowance, not the cash contributions you pay¹.

That matters because a pay rise, a change in your hours or a promotion can increase your pension input amount without any change in what you pay each month. The annual allowance is covered in more detail on the annual allowance page, and the tapered version on the tapered annual allowance page.

NHS Pensions has reported delays to 2024/25 Pension Savings Statements and the implications for Self Assessment³. NHSBSA apologised for delays to 2024/25 Pension Savings Statements with no confirmed date for issuing outstanding statements³. It also announced forecasted deadlines for Remediable Service Statements, with information for employers³.

If you are affected by the McCloud remedy, the McCloud remedy for public sector pensions page explains what it is and how it works. NHSBSA states it will send the majority of active and deferred remedy members their Remediable Pension Savings Statement by October 2024³.

Service and complaints

If you have a problem with your NHS pension, the first step is usually the scheme administrator. The Pensions Ombudsman investigates and resolves complaints and disputes about occupational and personal pension schemes⁹. It can look at complaints about the administration of personal and occupational pension schemes¹⁰.

Complaints about workplace and government or state pensions go to the Pensions Advisory Service and Pensions Ombudsman¹¹. The Pensions Ombudsman can help if you have a complaint about your pension scheme¹².

Pension scheme dispute resolution procedures must provide information about the Money and Pensions Service and the Pensions Ombudsman to the complainant at certain stages of the dispute¹³. In the first quarter of 2026/27, 18 complaints were opened about occupational pension schemes¹⁴.

If you are unhappy with how a pension provider, platform or fund manager has handled things, there is a page on complaining about a pension provider, platform or fund manager, and one on the Pensions Ombudsman and complaining about a pension.

If you are struggling with debt, StepChange offers support for people over 55¹⁵. Pension Wise offers tailored guidance on how you can make the best use of your pension savings, available online, over the phone, or face to face¹⁶. There is more on the Pension Wise page.

Protection: what covers the NHS scheme and what does not

The NHS Pension Scheme is an unfunded public service pension scheme¹. That means it is not covered by the Pension Protection Fund, which protects millions of people in the UK who are members of defined benefit pension schemes¹⁷. The PPF covers private sector schemes where the employer becomes insolvent, not public service schemes.

The Financial Services Compensation Scheme also does not cover defined benefit schemes themselves, which are protected by the Pension Protection Fund¹⁸. So the usual compensation safety nets that apply to bank accounts, investments and insurance do not apply here in the same way.

What protects you instead is the scheme rules themselves, the role of the Pensions Ombudsman in resolving disputes, and the legislation that governs how the scheme is run. The Pension Schemes Act 2021 was introduced to protect members from pension scams by helping trustees of occupational pension schemes ensure transfers of pension savings are made to safe and not fraudulent schemes⁸.

If you are comparing this with a private sector defined benefit scheme, the PPF vs FSCS protection page sets out how the two safety nets differ. There is also a page on the Pension Protection Fund: if your employer goes bust and one on defined benefit and final salary pensions explained.