NHS Pension Scheme: changes from April 2025
Member contribution salary thresholds have changed from 1 April this year and the DHSC has confirmed changes to NHS Pension Scheme regulations which have taken effect from 1 April 2025.
Member contributions
The salary thresholds used to determine a member’s contribution rate have been uplifted from 1 April 2025 in line with the Consumer Prices Index (CPI) from September 2024 (1.7 per cent).
The changes have automatically been updated in the Electronic Staff Record (ESR). The change aims to reduce the risk of a member having to pay higher pension contributions due to the annual Agenda for Change (AfC) pay award for England.
If the pay award is higher than the CPI rate of 1.7 per cent, the salary thresholds will be uplifted again. Find out more and view the member contributions table on our member contributions web page.
Changes to NHS Pension Scheme Regulations
Following a period of consultation, DHSC have confirmed the following changes to scheme regulations from 1 April 2025:
Pensioning overtime for part-time staff
The definition of overtime in the 2015 Scheme regulations will be corrected to align with the long-standing policy and practice for additional hours worked by part-time staff to be pensionable up to whole-time equivalent (WTE) hours. Any hours worked over and above WTE will continue to be treated as non-pensionable.
We expect that most employers will not view this as a change to current practice and will not need to take any action.
Actions for employers:
- Where an employer has not treated additional hours worked by part-time staff up to WTE as pensionable, the employer must contact affected members to let them know they can choose to have their additional hours treated as pensionable. Employers must do this by 1 January 2026.
- Members will have three months from the date of receiving this notification to make their election. The regulations allow employers to extend this period where their staff need further time to make their election, up to a backstop of 1 July 2026 by which time all elections should be made.
- Members who wish to choose to have their additional hours treated as pensionable will need to pay arrears. We encourage employers to give members sufficient time and flexibility to pay back the arrears.
If you require support with this process, you can contact the NHSBSA employer helpline or our pensions team.
Clarity on calculating member contributions where pay reduces during a period of absence
Since 1 October 2022, member contribution rates have been based on actual pensionable pay, rather than WTE. DHSC has clarified that the same principle applies when calculating contribution rates for members on reduced pay.
From 1 October 2022, member contribution rates during periods of reduced pay should be based on the actual reduced pensionable pay figure, rather than what the member would have been paid if they were on full pay (commonly referred to as deemed pay).
This amendment will not affect benefit accrual, and members will still build up benefits based on their deemed pay.
Many employers may already calculate contributions in this way, but we welcome the clarity to make sure there is consistency across employers.
Actions for employers:
- If employers have based member contributions during reduced pay on deemed pay, then this will need to be corrected retrospectively to 1 October 2022 and members may be owed a refund of overpaid pension contributions.
A further technical amendment will be made to ensure that members who go straight from full pay to zero pay (rather than first stepping down to reduced pay), can continue to accrue pension benefits. Member contributions for those on unpaid leave will continue to be based on the pensionable pay from directly before the member went on unpaid leave.
DHSC will remove the reference to women on maternity leave from the scheme regulations covering the treatment of Keeping in Touch (KiT) days for pension purposes. This change will clarify that KiT days for all members who are on adoption leave or shared parental leave will be treated in the same way.
Further changes and clarifications
- Members on neonatal care leave will be able to continue building up pension benefits.
- The 2008 Regulations will be amended to treat members on parental bereavement leave in the same way as members on maternity leave, adoption leave, paternity leave and parental and shared parental leave.
- Members who are affected by the McCloud remedy will be able to revoke a deferred choice election in certain circumstances.
- Please see the consultation outcome for other technical and miscellaneous amendments.
