NHS pension changes put most nurses ‘in terrible position’

Majority of staff will see monthly salary fall under new scheme, with Unison saying nurses face a choice between ‘less money now or a poorer retirement’

Majority of staff will see monthly salary fall under new scheme, with Unison saying nurses face a choice between ‘less money now or a poorer retirement’

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A union has said changes to NHS pension contributions could be the ‘final straw’ for nurses as the majority will see a reduction in their monthly salary from this month.

Unison warned that nurses will face a choice between less money now or in retirement, while some will consider opting out of the scheme in order to cope with rocketing energy bills and soaring interest rates.

Though the changes to pensions in England and Wales will benefit part-time workers and top earners, most full-time staff will see their pension contributions increase along with a subsequent reduction in pay.

Pension decision poses dilemma for many nurses

Sara Gorton

Unison head of health Sara Gorton said that the government ‘chose to ignore advice’ that pay awards needed to be high enough to absorb any pension changes.

‘NHS staff are now in the terrible position of having to decide between less money now or to opt out and face a poorer retirement,’ she added. ‘But the more people who leave the scheme, the worse the pension prospects are for everyone.

‘Losing out in this way could well be the final straw for many health employees at the end of their tether.’

RCN national officer team leader Chris Musgrave said the changes were another ‘unexpected financial hit’ for nurses.

‘Many members are also concerned they are being forced to choose between dignity in retirement and keeping their head above water today.

‘We are urging all members to take independent financial advice before making pension decisions that may be more damaging in the long term,’ he added.

Number of pension tiers reduced

The pension changes, which came into force on 1 October, were due to begin in April, but the plans were postponed by the Department of Health and Social Care (DHSC) over concerns about the rising cost of living and to align with the recent NHS Pay Review Body announcement.

The new system will see a reduction in the number of tiers in the pension contribution scheme, with tier boundaries increasing every year in line with annual Agenda for Change pay awards in England.

Nurses on bands 5 to 7 bear the brunt of changes

The change is intended to avoid members of staff moving up a pension tier when they receive small salary increases, and thus reducing their monthly salary. However, it could reduce current take-home pay for most full-time staff, with band 5 to 7 nurses among those hardest hit.

A newly qualified band 5 nurse on an annual salary of around £25,000 could end up paying about £300 more per year into their pension. This means their monthly take-home pay would fall from around £1,850 to around £1,550.

A spokesperson for DHSC said the pension scheme is ‘one of the best available’ and the changes ‘will reduce the possibility of a small number of members having their take-home pay reduced as a result of crossing into a higher contribution tier’.

What are the pension changes?

  • Pension contributions will be based on actual pay rather than notional whole-time equivalent pay – this is fairer for part-time staff and many will see their contributions reduce
  • The new structure aims to even out the proportion of salary paid by members in different wage brackets – this will benefit top earners, who will pay less, while those on low and middle pay bands will see their pension contributions increase
  • Pension bands will be aligned to annual Agenda for Change pay increases – this should prevent nurses ending up with less take-home pay just because they receive a small pay rise
  • The changes will be phased in over two years; the first phase was implemented on 1 October

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