The Department of Health and Social Care has responded to the consultation on proposed changes to the member contribution structure for the England and Wales NHS Pension Scheme.
So what are the changes?
The main changes to the member contribution structure are outlined below:
- Members’ contribution rates will change to be based on actual pensionable pay instead of members’ whole-time equivalent pay. This means most part-time staff will pay less into their pension than they currently do.
- The structure for member contributions will change, which, with a couple of exemptions, will mean full-time scheme members earning under £47,846 will pay more.
- The thresholds for the member contribution tiers would be increased in line with annual AfC pay awards. This will help address the contribution rate cliff edges where previous pay increases resulted in some scheme members paying a higher contribution rate.
- The proposed member contribution structure would be phased in over two years.
- The implementation of the new contribution structure will begin on 1 October 2022 rather than 1 April 2022 as was proposed in the consultation.
The full response from the DHSC can be found here.
As was the case when the DHSC consulted on the proposed changes UNISON remains very concerned about the Government’s approach to making these changes. This restructure to the way scheme members pay into their pension will pass on the costs onto lower paid scheme members while the highest earners stand to benefit the most.
The Government’s insistence that the NHS Pension Scheme must deliver a 9.8% yield means that, in general, lower paid full-time scheme members will pay more.
This is inequitable at a time when they are also being hit hardest by the cost-of-living crisis.
We believe the Government should rethink their approach.