The NHS Pension Scheme is financed by payments from the employer and current members who pay contributions at different amounts depending on their pay.
Employer contributions and administration levy
The employer contribution rate for the period 1 April 2019 to 31 March 2024 is 20.6 per cent of pensionable pay for both the 1995-2008 Scheme and the 2015 Scheme.
The employer contribution rate is set through a process known as the scheme valuation. A scheme valuation is carried out every four years and it measures the full cost of paying pension benefits (to current pensioners). The most recent 2016 scheme valuation identified the need to increase the employer contribution from 14.3 per cent to 20.6 per cent from 1 April 2019.
Employers are required to pay a scheme administration levy, in addition to the employer contribution rate, to cover the cost of the scheme administration. This levy is 0.08 per cent of pensionable pay and will be collected at the same time and in the same way as normal employer contributions. In practical terms, this means employers will pay 20.68 per cent of pensionable pay.
For the 2019/20, 2020/21, 2021/22, 2022/23 and 2023/24 scheme years, employers are responsible for paying 14.38 per cent of contributions, with the remaining 6.3 per cent being funded centrally.
The 2020 valuation will conclude in Autumn 2023 and will determine the employer contribution rate for four years from 10 April 2024. We will update our website when the new rate is announced.
A contribution structure is in place to determine the percentage of pensionable pay that members are required to pay into the NHS Pension Scheme, based on their pensionable earnings. A new member contribution structure came into effect on 1 October 2022, replacing the old structure that had been in place since 1 April 2015.
For more detailed information on member contributions, visit our dedicated web page.