Posted 18 February 2022 - 12:00
Posted 18 February 2022 - 12:00
News
Pay packets to shrink for many nurses due to NHS pension changes
Effect of changes in pension contributions on take-home pay called ‘a step too far’ by union but top earners and part-time nurses will benefit
Effect of changes in pension contributions on take-home pay called ‘a step too far’ by union but top earners and part-time nurses will benefit
Many nurses will see a reduction in take-home pay because of upcoming changes to NHS pensions, with unions warning this could be ‘a step too far’ for demoralised staff.
The changes to pensions in England and Wales, which were due to happen in April but have been pushed back to October, will benefit some nurses, including those who work part-time and top earners.
But most full-time staff will see their pension contributions increase, meaning they get less money in their wage packets.
Nurses on Bands 5 to 7 will be among those hardest hit
Band 5 to 7 nurses will be among those hardest hit, with many facing a noticeable reduction in take-home pay. For example, 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 reduce from £1,603 to £1,583.
The move comes at a time when nurses are concerned about the spiralling cost of living and facing hikes in energy bills and the price of other essentials like food.
RCN executive lead for pay Colin Poolman said: ‘When the cost of living is soaring, increasing people’s pension contributions will be another blow that some can ill afford.’
Unison head of health Sara Gorton said the changes could prove ‘a step too far’ for some. ‘The government must get behind an inflation-busting wage rise for NHS workers to soften the blow – or many will walk,’ she said.
What are the changes?
- Pension contributions to 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
- A new structure aimed at evening 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 aligned to annual Agenda for Change pay increases – should prevent nurses ending up with less take-home pay just because they get a small pay rise
- Changes will be phased in over two years, with the first phase implemented on 1 October 2022
Chief executive of NHS Providers Chris Hopson said some of the changes were welcome but there were concerns about the impact on lower and middle band staff.
He said: ‘These staff tend to be younger and from minority ethnic backgrounds. It is vital that these changes do not undermine the efforts of trust leaders to improve retention, drive recruitment and tackle race inequality.’
The Department of Health and Social Care (DHSC) said the decision to postpone was made after listening carefully to concerns about rising living costs.
A DHSC spokesperson said: ‘Those in higher pay bands pay more per month on the scheme, ensuring lower earners and part-time workers pay reduced contribution rates – that applies to more than half of all pension scheme members. This will narrow the range between the lowest and highest contribution rates, ensuring that the costs and benefits of the scheme are more evenly shared.’
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