Sadly – many nurses can’t afford their “gold-plated” pensions.

“The Government can get people back to work – and also reduce taxpayer costs – by allowing all public sector workers to choose higher pay today, in exchange for a lower DB pension in retirement” – John Ralfe

This is not a daft idea, it deserves attention and in the absence of better, will get it.

The NHS Pension Scheme employer contribution rate increased on 1 April 2019 from 14.3% to 20.6%, ( plus the employer levy of 0.08%).

If a nurse could “flex” pension for pay, employers could afford to pay more salary (but remember salary requires employers to pay National Insurance while pension contributions don’t- so it’s not quite one for one).

So if you agree with the Government that nurses aren’t fundamentally underpaid, then a pension flex makes sense.

If your view is that NHS pensions aren’t “gold-plated” but a way to allow people to retire in dignity with retirement, you will baulk at the opportunity to flex.

If you are a nurse, you pay a sliding scale of pension contributions, reducing as a percentage of your pay the less you earn


For nurses who earn under the lower earning limit for income tax, there is no tax incentive (though this will change in 2025 so that all nurses get either the tax relief or the equivalent tax-incentive). So giving up pension might also mean more take home.

Once employee contributions reduce below 4% (of band earnings) , members are no longer auto-enrolled , this is a further complication.

A pension scheme many nurses can’t afford.

It is right that people understand the total pay (reward) is the amount to compare nurses NHS pay (compared with private sector pay).

But this dispute is not about nurses leaving to the private sector, it is about how we value nurses.

“Gold Plated” is not the lifestyle I see among retired nurses I know . It would be interesting to know what the average retirement income of a former NHS nurse is today but certainly nurses should be a lot better off for being in the pension scheme.

If you’d been listening to radio 5 this morning at 2.25  you could have heard a 78 year old widower explaining he would not see his 64 year old son who recently died – cremated. He did not have any means to pay for a cremation ceremony. There are costs for not being in a pension.

All NHS employees enjoy a CARE scheme, which entitles them to 1/54th of each year’s earnings, which means that taken together with state pension (some of which is paid out of the NHS scheme) nurses could retire on an equivalent standard of living as a pensioner to when they were at work.

But figures from the NHS Business Services Authority (NHSBSA) show that between April and July this year, 66,167 NHS staff in England and Wales opted out of their NHS pensions, more than double the 30,270 who removed themselves from the pension scheme during the same period last year.

The Nursing Times reports that  4,378 registered nurses stopped paying into their NHS pensions between April and July this year and, in total, 11,937 nurses have opted out since April last year.

The sad truth is that for many nurses , the NHS pension is just too expensive. gold-plated or not.

According to Nursing Times, a newly qualified nurse in England and Wales on a salary of around £27,000 would pay around £183 of their basic salary into their pension each month.

Using the Minimum Income Standard (MIS), which is used to calculate the UK real living wage, the New Economics Foundation found in October  that the income of a single newly-registered Band 5 nurse with two children, would be between £1,450 and £1,750 below the MIS

This looks like a design issue supporting the argument of a pension flex. Many nurses already qualified for the pay-rise suggested but for all the wrong reasons.

Has the argument been made that the NHS pension scheme is already a lot less expensive for so many staff leaving it?

Unfortunately, I suspect that the deferred windfall to the tax-payer resulting from these opt-outs will not count for much at the Treasury which is looking at immediate costs. The pension costs from retiring nurses are unlikely to be counted in HMT calculations.

And this may be why putting pensions on the bargaining counter , hasn’t happened yet.


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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4 Responses to Sadly – many nurses can’t afford their “gold-plated” pensions.

  1. Adrian Boulding says:

    There was a lot of debate at the start of auto enrolment about creating a sub-class of “cheap seats”. But alongside the seemingly consumer friendly question “if you’re struggling to afford your pension contributions would you like to pay at half rate?” come some rather undesirable long term demographic implications, driven by human behavioural economics.

    If you want to look at how allowing more short term choice pans out, then take a look at the 5million or so people who have complete freedom as to what level of pension provision they choose. That’s the self-employed, and a great many of them are heading to a bleak retirement.

    The NHS has a good pension scheme and they should be protecting it, not nibbling away at the edges.

  2. Allan Martin says:

    As a big supporter of DB pensions for all our public sector workers, not just those finishing a night shift this morning, I cringe every time I hear mention of public sector pay, GDP and sustainability . Pensions are deferred pay and public sector (deferred) pay awards of CPI+0% to CPI+1.6% are going through for post 2015 CARE pension benefits. (The purportedly more expensive final salary (pre 2015) accruals are another ignored story). The public sector 1/42 – 1/61 pension fraction accruals rely on an unattained and currently unattainable discount rate based on GDP. Arithmetically, H M Treasury is running a Ponzi scheme, the OBR is arguably irresponsible in not highlighting the risk and the Treasury Select Committee needs to act. The lack of awareness is scary.

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