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Pension costs to increase with pay

  • 8 Comments

Higher earners in the NHS will be asked to contribute up to 60% more towards their pensions, sparking fears they may withdraw from the scheme and deplete its funds.

Chief secretary to the Treasury Danny Alexander said last week the government was to start talks with health unions on how the average 3.2 percentage point rise in public sector pensions contributions could be distributed.

He said staff should pay no more than an extra six percentage points towards their pensions by 2014-15 and that the burden would be loaded onto higher earners.

Better paid NHS staff, on salaries of £110,274 or more, could end up paying 14.5% of their wages on pensions. Those on less than £15,000 would see no increase and those earning £15,000-£21,000 would pay up to 1.5% more.

Royal College of Nursing senior employment relations adviser Gerry O’Dwyer said: “People on higher salaries might decide they have better ways of saving their money. That will increase the pressure on those remaining and make it potentially more difficult to pay out pensions.”

Unions are due to meet with NHS Employers and the Department of Health next week.

  • 8 Comments

Readers' comments (8)

  • how can we be epected to pay more for less, at a time when pay is frozen, those on the higher salaries can afford the higher amouunts.The pension scheme is meant to reward staff for long hours in conditions of short staffing and hopefully aid retention. This idea wil drive people out of the NHS that way yes the govt will save money, but who will look after the ageing,obese,dementia ridden populace

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  • as the article says, it could drive higher earners out of the scheme leaving the pension funds depleted for those who really need them.

    how come contributions are not compulsory as they are in some other European countries where the employer and employee pay a percentage of their salary? at least this ensures they have the guarantee of some income during retirement in addition to the basic state pension which is only designed to cover basic living costs.

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  • It is a bit trite to say higher earners can afford the rise.

    I am on a Band 7 and never have any spare cash. I suspect the same is true for those earning a great deal more than me. Something about living up to your means?

    Funny how I coped on tiny earnings back in the 80s....

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  • Anonymous | 27-Jul-2011 9:10 am

    depends how you spend it and how many dependents you have

    its all down to good management

    people have to live on income far far lower than band 7 and pay pension and NI contributions as well!

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  • This article mentions only those in the highest and lowest salary scales. The vast majority of NHS employees (most Nurses in particular) are somewhere in the lowish to mid-salary scale. This means that a Band 5 Nurse on twenty four and a half thousand a year will be paying almost £737 more per year in pension contributions. Ultimately, to receive a poorer pension.

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  • This is vastly unfair. What is the point in even working in the profession? What is the point in working our arses of and moving up the bands? There is certainly no point in paying into a pension scheme that will not pay you back what you pay in!

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  • both me and my wife work for the nhs and we will both leave the scheme if the contributions go up

    why contribute to a scheme that will give you less back and expect you to work longer...NO CHANCE

    with everything else going on...pay freeze, threatened increment freeze..how the hell are you suppossed to pay for these increased contributions..oh I know, cut back on eating, driving heating etc..oh sorry there all going up as well..

    its ok though the tory moron govt are looking after there rich mates in the banking sector..thats ok then eh!!!

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  • Leave our pensions alone, a higher band will get more but pay more that is life.

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