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Nurses face paying hundreds more into pensions

  • 21 Comments

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.

  • 21 Comments

Readers' comments (21)

  • a call to all unions

    tell them to shove it where the sun does not shine

    im sick of this..pay freeze..increment freeze...working longer...job losses

    its ok though the rich tory friends in the banking sector still get their bonusus as we are all in this together..what a load of crap!!!!!

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  • Spin Spin Spin Spin Spin

    18% of 5% is actually less than an additional 1% of gross wages. Whilst agreeing that the wage freeze is real, energy bills going up is real etc, lets not lose sight of the real figures. During the regrading exercise of the mid 1980s when some grades got 20% salary uplifts the clarion call was "20% of not very much is less than not very much" so the same must apply here.

    There are lies, damn lies and statistics so lets keep some perspective.

    For the record I am a moderate and do not have a strong opinion in favour of the changes or against them, but I can't let reporting like that go without challenge.

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  • For many years the NHS pension scheme has been a key factor in my decision to remain an NHS employee. Back in the late 80's and early 90's I resisted the considerable pressure to switch over to a private pension scheme when I was being relentlessly informed how poor the NHS pension was by comparison. This government seemingly removed the single most important retention factor for it's most senior, experienced staff - perhaps that is the intention?

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  • It’s disgusting: there’s no two-ways about it! Totally agree with the comments regarding the NHS pension being probably the only reason why people stay in NHS. The reality is, I’m afraid, that most of us won’t be working for the NHS in the next few years. Doesn’t matter where you work: theatres, maternity, mental health, community or acute expect the private sector to come knocking at your door. I think what colleagues need to worry about is NOT how much extra money they put into their pension scheme, but - come privatisation - how they get their money out!

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  • I am abroad and I just wonder whether
    the NHS being 'covertly' wound down? this is the impression I get from the NT and the British national press?

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  • The pensions were last looked at in 2008. It seems the banking crisis has moved the goalposts! When things inevitably improve will the nhs workers have to pay less or get more? I have never known the conditions where nhs workers have been given a fair shake: 'Inflation too high', 'inflation too low' 'the world is going to end'. Is there anyway i can have my money back? I feel as though ive been misold a product. I want my money back! I want my money back!I want my money back! Pleeeeeeeeeeeeeeeeease.......

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  • It is time for action. MP's have a full purse when they retire. We the Nurses, like the general public, have to find the pennies to meet the general bills but also our RCN subs and that dreaded NMC prices are hiked. So I say come on RCN and other unions stop the government hitting the public workers. It is time for action.

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  • I too am worried about my pension.have been in nursing for 40 years and looking forward to my final salary pension even if retirement goalposts keep being moved.DO I take my superann out now and then return to work so I don't lose out or do I keep paying in the hope will still get a decent pension as I too was told would be better to stay in than opt out It's time we stood up for ourselves and let the goverment know we are NOT happy

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  • Anonymous | 2-Aug-2011 3:20 pm

    Personally, if I were you I’d take my money out now without hesitation. Yes, you may lose a few thousand, but at least you will have your money. Get good financial advice too as there are ways of investing it so that you don’t pay a fortune in tax and you can continue to work, you only need to be off 24 hours.

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  • I would be very wary as an anonymous about giving advice on here to others or taking it myself from another anonymous. it is a very serious decision which can affect the rest of one's life.

    Isn't it better to try and find out from the experts first what is really happening before making a decision or is this not possible because there is no certainty on the matter?

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