Nurses face paying hundreds of pounds a year into their pensions after the government unveiled proposals to shore up the NHS pension scheme which have resulted in fury from the nursing unions.
The announcement comes as nurses have had their pay frozen until 2013, face having to work until their late 60s due to proposals to extend the retirement age and are battling attacks on pay increments.
At the same time, they are being hit with higher energy bills, rent rises and inflation (see above) as the economy stalls after the banking crisis.
Now the Department of Health has released a consultation proposing that staff should contribute up to 28 per cent more towards their pensions from next April, rising again in 2013-14 and 2014-15.
The average nurse, earning £34,600, would pay 18 per cent more in 2012-13 under the plans.
After tax relief is taken into account, a staff nurse earning £25,000 must pay an extra £120 a year, while a nurse consultant earning £60,000 would pay an additional £720.
Above this, contributions rise further so that a board director on a £130,000 salary will pay an additional £1,824.
Royal College of Nursing general secretary and chief executive Peter Carter said: “Hard working nurses are in the middle of a two year pay freeze, inflation is soaring and they now face the prospect of paying more money into their pension next year for no additional benefit.
“This latest development is not just about contributions in 2012. It is the start of a process that will increase contributions even further and make nurses work until they are dropping on their feet. All this is likely to have a devastating impact on the morale of dedicated nurses.”
He added: “This is not a fight the government needs at this time.”
Despite paying more it is likely that nurses will receive a less generous pension in future.
Currently, NHS staff pay between 5% and 8.5% of their salaries towards their pensions, with higher earners paying a bigger proportion of earnings. In return, employers pay a further 14%.
But the government wants to save £2.3bn in 2013-14 and £2.8bn the year after from public sector pension schemes, requiring each sector – including the NHS – to raise staff contributions by 3.2 percentage points.
It has said that anyone earning under £15,000 will not have to pay more, but Unite lead nursing officer Barrie Brown said this would apply to few, if any, NHS workers once additional payments such as London weightings were taken into account.
The government has also indicated it wants to replace final salary pensions – favouring those whose salaries shoot up as they near retirement - with a scheme based on members’ average earnings across their whole career.
Plans to raise the retirement age from 65 to 68 by 2046 are also part of the negotiations that unions say have been pre-empted by the DH’s announcement on contribution rates.
Mr Brown expressed anger that the government had pre-empted the result of talks which could have seen higher contributions been negotiated. He asked: “What are we going to be able to negotiate on now?”
A statement released on behalf of unions including Unison and Unite said the announcement “seriously undermined” the discussions. “It will be extremely difficult for unions to consult members over these proposals when they will not know the possible increases in contributions due in 2013 and 2014 and before we have even started negotiations on possible further reforms of the NHS scheme,” it said.
A Department of Health spokesman said the measures needed to be seen in the context of predictions that the value of the NHS scheme, which now stands at £1.6bn, would drop to £150m by 2015-16 if no change was made.