Donations to new NHS pensions to go ahead
By Edie Bourne
Doctors who are part of the NHS Pension Scheme will pay revised contribution rates following the Government consultation which ended in January – but the new rules have been delayed for six months until October 2022.
One of the main updates is that doctors’ contribution rates will be based on pensionable pay rather than their notional whole-time equivalent pay. Part-time members would therefore pay reduced pension contribution sums in the future.
The changes, initially proposed in a consultation launched last October, are part of moving all members to the 2015 pension scheme from April 2022. The 2015 scheme is a career average revalued earnings (CARE) pension scheme unlike the former final-salary schemes of 1995 and 2008.
New contributions – which will also be decreased from seven to six tiers – will be phased in over two years. The full amendments can be seen in the chart below, but, in general, higher earners will be contributing less into their pension.
For example, the highest contribution tier would be lowered to 12.5% rather than the current 13.5% and 14.5%.
Patrick Convey, technical director at specialist financial planners Cavendish Medical, said: ‘The new contribution rates may be positive for those in higher income brackets – but facing further changes can make it difficult for NHS members to ascertain their true pension position, particularly when the full McCloud remedy has not yet been introduced.
‘We always assumed the new rates would be delayed, as it seemed unfathomable to introduce this major overhaul just two months after the consultation concluded.
‘The extension will give everyone more time to adjust to the new rates as well as the significant changes caused by moving everyone to the 2015 scheme. After all, we are still not due to receive official McCloud regulations until October 2023, which could make matters even more complicated.’
The McCloud remedy sets out how and when those deemed to have suffered age discrimination by moving to the 2015 NHS pension scheme originally will be compensated.
