2015 NHS Pension Scheme - New Information Released This Month

2015 NHS Pension Scheme - New Information Released This Month. The Department of Health has issued an update on the new NHS Pension Scheme reforms and contribution rates. 

Please email me on richard.higgs@wealthwestmedical.co.uk for an update on your individual situation.


The introduction of the new 2015 NHS Pension Scheme has come as a result of the recommendations of Lord Hutton in his 2011 report on the state of public sector pensions and the need for reform. The main theme behind the report was to make public sector pensions economically viable in the longer term whilst also protecting the pension needs of members.

In March 2012 the Department of Health issued its Proposed Final Agreement entitled 'Reforming the NHS Pension Scheme For England and Wales' which set out, at a high level, the proposed design of the new scheme to be implemented from 1st April 2015. Since then, the detailed rules have still to be announced and so this weeks update is welcome.

How Does The 2015 NHS Pension Scheme Differ To The Existing 1995 And 2008 Sections?

1. Calculation of Benefits

- Currently pension benefits for hospital doctors are calculated by using their Final Salary, i.e their salary as they approach retirement which is likely to be when it is at its highest. The pension benefits of the new scheme will be based on Career Average Revalued Earnings (CARE).

- Currently hospital doctors build up pension  at the rate of 1/80th of final salary per year of service in the 1995 section and 1/60th of final salary per year of service in the 2008 section. Under the new scheme doctors will build up pension at the rate of 1/54th of pensionable earnings in each year of membership. Although GPs already accrue their pension using the CARE method - the calculation will be different in the 2015 scheme.

- A CARE scheme will take your earned pensionable income for each and every year you are in the scheme - and then revalue these earnings by inflation. This increase will take place at the end of each year (31st March) and will be based upon the rate of inflation + 1.5%.

- There will be no limit on pensionable service in the new scheme subject to an upper limit of 75. This is different to the 1995 and 2008 scheme's where the limit is currently 45 years of pensionable service.

2. Normal Pension Age

- The normal pension age is the age that a member can take their pension benefits in full. This is 60 for the 1995 section and 65 for the 2008 section. For the 2015 Scheme the normal pension age will be linked to the state pension age.

3. New Reduction Buy-Out Facility

- There is to be a new facility which allows members of the 2015 Scheme with a Normal Pension Age higher than 65 to pay additional contributions to reduce or, in some cases remove any early retirement reduction that would apply to their 2015 Scheme benefits if they retired before their NPA.

4. ill-Health Retirement

-  The ill-health retirement rules are broadly the same for the 2015 scheme as they were for the 1995 and 2008 sections. There remains two 'tiers' of ill health pension. Tier 1 is met where the member is ill enough that they are permanently incapable of performing the duties of their current employment.  Tier 2 is met where, additionally, the member is incapable of any work at all. 

- A 1995 or 2008 Section member in receipt of Tier 2 ill-health pension cannot pension further NHS employment. In addition, their pension may reduce to a Tier 1 ill-health pension if any new earnings are higher than the lower earnings limit for National Insurance purposes, or if they return to NHS employment for more than one year. This is the same for the 2015 scheme. A member in receipt of a Tier 1 ill-health pension can pension further NHS employment in the 2008 Section of the NHS Pension Scheme and this is also the case for the 2015 scheme; however their pension maybe abated.

- For Tier 2 ill-health pensions in the 2015 Scheme these will be enhanced by a half of the prospective service up to the members State Pension Age. In the 1995 and 2008 Sections this enhancement is 2/3rds prospective employment to Normal Retirement Age.

What Aspects of the 2015 Scheme Are The Same As The 2008 Section?

Many of the benefits of the 2008 Section are also available in the 2015 Scheme:

- Survivor benefits (spouse, partner and children) continue to be based on an accrual rate of 1/160th. For deaths in retirement pensions will continue to be based on pre-commuted pension.

- A lump sum continue to be payable on death.

- Certain flexibilities like drawdown of pension on partial retirement and being able to retire and later return to employment and re-join the pension scheme will be included.

- Commutation of pension to a single cash lump sum where a member qualifies for life expectancy under 12 months

- Option to purchase additional pension.

- Flexibile retirement features like 'Wind Down', 'Step Down' and 'Draw Down' will continue.

- Abatement (reduction) of pension will be a feature of the 2015 Scheme. It will apply to pensioners who have retired early and are in receipt of a pension and then return to NHS employment. 






More News
Can doctors trust the rising market? Monday, July 23, 2018
Quote Mark
  • "We have been very impressed with the personal service, attention to detail and comprehensive evaluation of our financial circumstances. We would certainly appreciate ongoing help and support from Richard over the future." Jason Kendall (Consultant in Accident and Emergency), Southmead Hospital
  • "Richard provides a very convenient and personal service. Richard has good knowledge and has the ability to go through reasoning for any recommendations." Tim Mitchell (GP), Montpelier Health Centre
  • "Richard provides an excellent service, prompt and flexible. Although the level of technical knowledge is impressive, answers to our questions are presented in a straightforward manner, without overwhelming us with information." Mary Gainsborough (Consultant in Paediatrics), Southmead Hospital
  • "Richard gives me an excellent personal service in my own home. His advice and explanations have been excellent. Richard also has excellent technical knowledge – who wouldn’t be happy?" Charles Record (GP), Frome Valley Medical Centre
  • "Richard provides an excellent, personal service. He responds very quickly and attentively to queries and very much keeps me up to date with important matters that affect me - such as the latest changes to pensions, investments and taxation. Recommendations are delivered in a timely, effective manner - usually face to face in my own home." Professor Gianni Angelini (Head of Cardiothoracic Surgery), BRI
  • "It is very convenient for me to be seen at home and Richard is very flexible with timings - especially when unexpected things crop up at the hospital. Meetings are friendly and relaxed with my long-term best interests very much at the heart of discussions." Professor Gianni Angelini (Head of Cardiothoracic Surgery), BRI
  • "We have found it far more reassuring having a local adviser rather than a national firm. We have found the service excellent and Richard answers all the questions we want answering. Richard's technical knowledge is excellent, he has detailed knowledge of pensions." Paul Male and Helen Lewis (GPs), Thornbury Health Centre
  • "The personal touch counts for a lot and the willingness to visit us at home is much appreciated. Richard provides an excellent, friendly, accessible service, not encumbered by jargon or salesmanship." Professor Peter Mathieson (Honorary Professor of Medicine), University of Bristol
  • "I can recommend Richard as providing measured, balanced independent financial advice. He listens very carefully and tailors advice appropriately in a knowledge-based manner. He is very accessible and gives his clients time and clarity in order to make the most sensible decisions for themselves based on the available facts." Andrew Medford (Consultant in Respiratory Medicine), Southmead Hospital
  • "Richard now knows me and understands my financial position. I have complete trust in his advice. The level of service I have experienced is second to none. We have received regular reviews in our own home, speedy and thorough advice to any queries." John Rees (General Practitioner, Specialist in Urology ), Blackwell and Nailsea Medical Group
  • "The advice I have received has dramatically altered my personal protection policies for the better and reduced my personal tax liability." John Rees (General Practitioner, Specialist in Urology ), Blackwell and Nailsea Medical Group
  • "I appreciate Richard's local knowledge and the fact that he is in contact with a lot of local general practitioners which is useful for networking. He is also very knowledgeable about the different pension schemes and their pros and cons." Fiona Hayes (General Practitioner) Bristol University Student Services
  • "I have enjoyed the process of dealing with a local advisor and it has not felt like a box ticking exercise. The service has been excellent. The great flexibility to come to my home at a time suitable to my working day has set this company apart from others I have dealt with in the past. The technical knowledge provided has been expertly tailored to my requirements and financial situation. The manner in which it has been delivered has also been first rate. " Beth Harrison (General Practitioner) Montpellier Health Centre
  • "We have regular meetings with the same adviser who knows our profile and keeps our requirements in mind with the plans he makes. The reviews are simple to organise and are always at a convenient time and location." Mike Bould (Orthopaedic Surgeon) Western General Hospital
  • "The service I have received from Wealth West is excellent! they are more personable and accessible than large firms and are not pushy at all. They also have a very good breadth and depth of knowledge." Billy and Annie Headdon (Anaesthetics and Intensive Care Trainee, General Practitioner) Montpelier Health Centre
  • "My experience of the service has been excellent. I have been able to ask many questions and have received excellent advice on my financial situation. The technical knowledge of Wealth West Medical is excellent. Anyone who can help my investments grow in the current environment clearly knows what they are doing. I would highly recommend Richard and Wealth West Medical." Linda Buczek (General Practice Manager) Bishopston Medical Practice
  • "The technical knowledge of Wealth West Medical is very good. Richard keeps up to date with the changes to the NHS pension scheme and new legislation." Melanie Lockett (Consultant) Southmead Hospital
  • "Wealth West Medical offers a friendly, helpful and efficient service. Richard keeps in touch at regular intervals and has a very good knowledge of pensions and investments." Rachel Brown (General Practitioner) Montpelier Health Centre
  • "Richard comes to my house for meetings and it is nice to see a familiar face. He remembers my details, and advises over the long term. Richard has a detailed understanding of my particular pension plan and has explained this very clearly to me. He has also helped me to manage tax payments for annual allowance and pension protection." Hugh Herzig (Consultant Psychiatrist) Southmead Hospital
  • .