Home » FAQ’s – NHS Pension Scheme

FAQ’s – NHS Pension Scheme

NHS Pension Scheme frequently asked questions. We aim to answer common questions relating to the nhs pension scheme on such matters as Ap, additional pension, ill health retirement, contributions, eligabilitynhs pension questionsNHS Pension Scheme Q and A


General | Ill Health Retirement | Additional Pension


General NHS Pension Questions

  1. What happens to my benefits if I leave the NHS?
  2. How much do I pay into my NHS Pension?
  3. What is the NHS Pension employers contribution rate?
  4. Where can I find out more information about my Pension Choice?
  5. Who can join the NHS Pension Scheme?
  6. Is it possible to retire and take my NHS Pension and continue to work in the NHS?
  7. Is my NHS Pension lump sum taxable?
  8. Can I cash in my NHS Pension?

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NHS Pension Ill Health Retirement

  1. What do I need to do if I think ill health retirement applies to me?
  2. Is there an age limit for ill health retirement benefits?
  3. Who decides if I qualify for ill health retirement benefits?
  4. What is the medical advisers role?
  5. What are the qualifying conditions for ill health retirement benefits?
  6. What does “permanently incapable” mean?
  7. How is “permanent incapacity” determined?
  8. If my employer terminates my contract due to ill health will I automatically qualify for ill health retirement benefits?
  9. If I am getting Incapacity or Disability benefits will I automatically qualify for ill health retirement benefits?
  10. What is a Tier 1 pension?
  11. What is a Tier 2 pension?
  12. Will my pension be index-linked?
  13. What if I have a serious illness?
  14. What if I am over age 60 (65) and have a serious illness?
  15. If my request for ill health retirement benefits is not successful can I appeal?

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NHS Additional Pension

  1. What is Additional Pension?
  2. Can everyone buy Additional Pension?
  3. I am receiving my pension / I have deferred benefits. Can I buy Additional Pension?
  4. How much Additional Pension can I buy?
  5. I am already purchasing added years, can I also purchase additional pension?
  6. How much does Additional Pension cost?
  7. Why is the cost different for men and women?
  8. Will Additional Pension increase any pension payable to my spouse, partner or children after my death?
  9. Will Additional Pension increase my retirement lump sum?
  10. How do I pay for Additional Pension?
  11. Will I pay the same amount every month?
  12. Will I get tax relief on my Additional Pension contributions?
  13. What happens if I have a short break in employment or leave the NHS?
  14. When is Additional Pension paid?
  15. I am taking partial retirement from the New NHS Pension Scheme; can I take part of my Additional Pension?
  16. I am a member of the “special classes” and my normal retirement age (NRA) is 55. Can I buy Additional Pension for payment at age 55?
  17. If I have a normal retirement age of 55 (and retire then) can I delay claiming my Additional Pension until I am 60?
  18. What if I decide to retire before my chosen age of 60 or 65?
  19. What if I have not paid all the Additional Pension contributions?
  20. What if my pension is paid early because I am made redundant or my employment is terminated?
  21. What happens if I die or retire early because of ill health?
  22. Is Additional Pension index linked?
  23. Is Additional Pension subject to Income Tax?
  24. How do I apply to buy Additional Pension?

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General

  1. Q. What happens to my benefits if I leave the NHS?

    A. Doctors who leave the NHS with at least two years’ scheme membership (or if they have less than two years’ membership but have transferred pension rights from a personal pension plan) will have their benefits preserved in the new NHS pension scheme. Doctors with preserved benefits can leave them in the scheme or transfer them to another registered pension scheme. A refund of contributions is not possible. Preserved main scheme benefits are increased each year in line with changes in the Retail Prices Index (RPI).In meeting the minimum of two years’ service required to preserve a pension the following should be noted: 

    • part-time service counts at its full (calendar) length
    • transferred in service will count at its full (calendar) length
    • breaks of not more than three months between periods of GP locum work count toward the required two years
    • length of membership in a previous pension scheme, if transferred to the NHS under Transfer of Undertakings (Protection of Employment) arrangements (TUPE), counts toward the required two years where the benefits were not transferred into the new NHS pension scheme.
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  3. Q. How much do I pay into my NHS Pension?

    A. Contributions are tiered depending on your NHS earnings starting at an annual contribution of 5.5% for the lowest earners rising to 6.5%, 7.5% and 8.5% respectively as earnings increase.


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  5. Q. What is the NHS Pension employers contribution rate?

    A. NHS employers pay 14% employer contributions.


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  7. Q. Where can I find out more information about my Pension Choice?

    A. We have a guide on our website that can be found by following the link here.


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  9. Q. Who can join the NHS Pension Scheme?

    A. Currently any NHS employee (except general dental practice staff) aged between 16 and 70.


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  11. Q. Is it possible to retire and take my NHS Pension and continue to work in the NHS?

    A. Yes. Theoretically, as long as you are of pensionable age you can take your NHS Pension and continue to work in the NHS. Of course every case is different but it is not uncommon for doctors to retire at age 60 on the old scheme and go back to their old job. Please see the article on flexible retirement and if you are in any doubt contact us for a review of your situation.


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    Can I cash in my NHS Pension?

  13. Q. Is my NHS Pension lump sum taxable?

    A. The NHS Pension cash lump sum element is paid tax free.


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  15. Q. Can I cash in my NHS Pension?

    A. No. Your Pension entitlement is secured and only accessible when you retire. You are able to take a proportion of your pension as a tax free lump sum of cash when you retire though.


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    Ill Health Retirement

     

  1. Q. What do I need to do if I think ill health retirement applies to me?

    A. If you are a current member and have at least 2 years membership, you should contact your employer for a form AW33E. This form is in three Parts; 

    • Part A – this is for your employer to fill in and provides information about your NHS employment and any absences due to illness or injury (sick leave)
    • Part B – this is for you to complete with your personal details and to give your consent for NHS Pensions and its medical advisers to consider your request
    • Part C – this section is for your Occupational Health Doctor to provide information and medical evidence about your condition
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  3. Q. Is there an age limit for ill health retirement benefits?

    A. Yes, in order to qualify for ill-health retirement benefits your last day of Scheme membership must be before your 60 or 65th birthday.This is because ill health retirement benefits provisions are limited to those members who have not reached their normal retirement age. Normal retirement age in the 1995 section of the NHS Pension Scheme is age 60, and in the 2008 section of the NHS Pension Scheme, age 65.


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  5. Q. Who  decides if I qualify for ill health retirement benefits?

    A. As decisions depend largely on medical assessments NHS Pensions takes advice from a professional team of medical advisers, doctors qualified in the field of occupational health – Atos Healthcare.


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  7. Q. What is the role of the medical advisers?

    A. The role of the medical advisers is to carry out an objective and independent professional assessment of all the available medical evidence and offer an opinion based on that assessment. The medical advisers can also commission further medical evidence if they consider it relevant and helpful to their assessment, for example your general practitioner or your specialist.


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  9. Q. What are the qualifying conditions for ill health retirement benefits?

    A. The NHS Pension Scheme provides two levels of ill-health retirement benefits, dependent on the severity of your condition and the likelihood of you being able to work again. 

    To qualify for a Tier 1 pension you must be permanently incapable of efficiently carrying out the duties of your employment because of illness or injury.

    To qualify for a Tier 2 pension you must be permanently incapable of engaging in regular employment of like duration to your NHS job (i.e. either whole time or part time) because of illness or injury.


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  11. Q. What does “permanently incapable” mean?

    A. For the purpose of ill health retirement benefits “permanently incapable” means until the Scheme’s normal benefit age. That is age 60 in the 1995 section of the NHS Pension Scheme or age 65 in the 2008 section of the NHS Pensions Scheme.


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  13. Q. How will I be determined “permanent incapacity”?

    A. In order to judge this NHS Pensions must be satisfied that not only has your condition been fully investigated but that all reasonable treatment options have been explored and have proved unsuccessful or inappropriate. In looking to establish permanence NHS Pensions use the civil burden of proof, i.e. the balance of probabilities.


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  15. Q. If my employer terminates my contract due to ill health will I automatically qualify for ill health retirement benefits?

    A. No – a decision by an employer to terminate a person’s employment will not automatically lead to payment of ill health retirement benefits from the Pension Scheme. The two are entirely separate and rely on different criteria. For instance, whilst the Pension Scheme Regulations require that a member is permanently prevented from efficiently performing the duties of their job, the employer, in considering whether termination is appropriate, may look at a considerably shorter period because of the need to have the post filled.


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  17. Q. If I am getting Incapacity or Disability benefits will I automatically qualify for ill health retirement benefits?

    A. Not necessarily – the criteria for acceptance of ill health retirement benefits under the NHS Pension Scheme are different to the criteria adopted by the Department of Work and Pensions when determining entitlement to incapacity and disability benefits. Entitlement to the latter benefits only takes into consideration the condition presently existing whereas the issue that NHS Pensions and its medical advisers must carefully consider is whether your health problems are likely to prevent you from carrying out the duties of your NHS employment, or regular employment, until the Scheme’s normal retirement age.


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  19. Q. What is a Tier 1 pension?

    A. If you are assessed as being permanently incapable of carrying out the duties of your own job you will be entitled to the early payment of the retirement benefits you have earned to date paid without any actuarial reduction for the early payment. In other words, these benefits will not be reduced to cover the extra cost of being paid before the Scheme’s normal benefit age.


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  21. Q. What is a Tier 2 pension

    A. If you are assessed as being permanently incapable of engaging in regular employment of like duration you will be entitled to the retirement benefits you have earned to date enhanced by 2/3rds of your prospective membership up to the Scheme’s normal retirement age.


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  23. Q. Will my pension be index-linked?

    A. Yes – your ill health pension will be fully index-linked to protect it against inflation. This means that it will be increased each year in line with the cost of living, for as long as it is paid.


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  25. Q. What if I have a serious illness?

    A. If you are terminally ill and do not expect to live longer than a year, you can apply to exchange all of your ill health benefits for a one-off, usually tax free, lump sum payment. If you want to do this you should let you employer (normally the Pensions Officer) know.


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  27. Q. What if I am over age 60(65) and have a serious illness?

    A. If you are terminally ill and do not expect to live longer than a year, you can apply to exchange all of your age benefits for a one-off, usually tax free, lump sum payment.  As your membership will not be enhanced you do not need to apply for ill-health retirement in the usual way but we will need confirmation from your doctor or consultant that your life expectancy is less than 12 months.  If you want to do this you should contact NHS Pensions or your employer (normally the Pensions Officer).


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  29. Q. If my request for ill health retirement benefits is not successful can I appeal?

    A. Yes – if you think we have made a mistake, or you simply do not agree with our decision, or you feel we have not dealt with your case very well, you can ask us to look at your request for ill health retirement benefits again under the Internal Dispute Resolution (IDR) procedures. To do this you must complete Form DRP1.

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Additional Pension

  1. Q. What is Additional Pension?

    A. Additional Pension has replaced the Added Years facility, which is now closed to most members. It provides contributing members with an opportunity to increase their Scheme pension by paying additional contributions. It is a flexible arrangement, which at the outset clearly sets out both how much, in current pension terms, the purchase is worth and how much it will cost.


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  3. Q. Can everyone buy Additional Pension?

    A. Yes, provided you are:

    • A contributing member; and
    • In good health and not absent from work for any reason; and
    • Have not yet reached age 65.
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  5. Q. I am receiving my pension / I have deferred benefits. Can I buy Additional Pension?

    A. No, only active members who are currently contributing to the Scheme can buy Additional Pension.


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  7. Q. How much Additional Pension can I buy?

    A. Additional Pension is bought in units of £250.00 annual pension, from a minimum of £250.00 up to a career maximum of £5000.00. Units can be bought together or separately but cannot exceed £5000 in total.


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  9. Q. I am already purchasing added years, can I also purchase additional pension?

    A. Yes, existing contracts will be honoured and you will be able to purchase additional pension as well, paying contributions up to 100% of your taxable pay.


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  11. Q. How much does Additional Pension cost?

    A. The cost varies depending on a number of factors including: 

    • your age when you start buying Additional Pension;
    • your gender;
    • when you plan to retire and draw the additional pension;
    • the type of cover you buy;
    • how much Additional Pension you buy.

    The Additional Pension calculator on this website will help you to work out the cost based upon your own retirement plans.

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  13. Q. Why is the cost different for men and women?

    A. Statistics show that women often live longer in retirement than men. AP costs more for women to meet the anticipated cost of paying the pension for longer.


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  15. Q. Will Additional Pension increase any pension payable to my spouse, partner or children after my death?

    A. Not automatically. You can choose to buy either: 

    • Personal cover – to increase your own pension only; or
    • Personal plus dependants cover – to increase your own pension and any pensions paid to your spouse, partner or dependent children when you die.
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  17. Q. Will Additional Pension increase my retirement lump sum?

    A. No, but if you choose to give up some of your pension to provide a lump sum you can include your Additional Pension in the pension you give up. has more information about giving up pension.


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  19. Q. How do I pay for Additional Pension?

    A. You will normally have the choice of paying the full cost immediately by a single lump sum payment or having instalments deducted from your pay. Instalments are spread over a number of years of your choice, from a minimum of 1 year usually up to a maximum of 20 years. To help you with your choice the Additional Pension calculator on this website will show you the cost by each method.


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  21. Q. Will I pay the same amount every month?

    A. Usually yes, but instalment purchases are subject to review based on advice from the Scheme Actuary. Reviews take place every four years and may change the cost of future instalments of an existing arrangement. 

    If the cost of future instalments increases as a result of a review you will have the option to end your purchase. You would then be credited with the proportion of Additional Pension that you have paid for.


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  23. Q. Will I get tax relief on my Additional Pension contributions?

    A. We cannot advise you about your personal tax position but members of a registered pension scheme, like the NHS Pension Scheme, can normally contribute up to 100% of their salary and claim tax relief. contains more information about limits on contributions and benefits. 

    When paying for Additional Pension by instalments tax relief is usually received through the PAYE system. If you pay by lump sum you will need to contact your local tax office or complete a self assessment tax return to claim the tax back.

    It should be noted that HM Revenue and Customs will not allow you to withdraw a tax-free lump sum and receive further tax relief by reinvesting the money back into a registered pension scheme. This is known as “recycling lump sums” and could apply if the money is reinvested as a lump sum or in monthly payments.

    It is possible that you could be affected by this rule if you retire within 2 years of making an election to buy additional benefits. If you think you could be affected discuss your plans with a professional financial adviser before proceeding.


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  25. Q. What happens if I have a short break in employment or leave the NHS?

    A. If you have short breaks in NHS employment of less than 12 months e.g. when changing jobs, you will be given the opportunity to continue your agreement but you will need to make up any missing instalments. If this happens tell your new employer about your Additional Pension purchase and make arrangements to pay the outstanding instalments. 

    If the break is more than 12 months or you leave the NHS altogether you be credited with the appropriate proportion of the AP you were buying. It is not possible to pay a lump sum to complete the agreement.


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  27. Q. When is Additional Pension paid?

    A. AP is paid at the same time as your main NHS pension. If you are a member of the NHS Pension Scheme (Amended April 2008) you can choose to have it paid at either age 60 or 65. In the New NHS Pension Scheme it can only be paid from age 65.


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  29. Q. I am taking partial retirement from the New NHS Pension Scheme; can I take part of my Additional Pension?

    A. No, you can either take all the Additional Pension now, or leave it all until your final retirement.


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  31. Q. I am a member of the “special classes” and my normal retirement age (NRA) is 55. Can I buy Additional Pension for payment at age 55?

    A. No, the cost of buying AP is based on the benefit becoming payable on or after the standard scheme retirement age, but not before. Members of the special classes must therefore choose whether to have their Additional Pension paid at age 60 or 65.


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  33. Q. If I have a normal retirement age of 55 (and retire then) can I delay claiming my Additional Pension until I am 60?

    A. No, Additional Pension is payable with your main NHS pension, it cannot be delayed.


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  35. Q. What if I decide to retire before my chosen age of 60 or 65?

    A. If you decide to take retirement before your chosen age the Additional Pension will become payable. If you have paid all the contributions due we will reduce the Additional Pension to take account of its early payment. If the contributions are not complete we will first calculate the proportion of the Additional Pension you have paid for and then apply the reduction for early payment.


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  37. Q. What if I have not paid all the contributions?

    A. If you are retiring on or after the chosen age you will be credited with the appropriate proportion of Additional Pension you have paid for. For retirement before the chosen age the appropriate proportion will be reduced for early payment.


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  39. Q. What if my pension is paid early because I am made redundant or my employment is terminated?

    A. If you have paid all the contributions due we will reduce the Additional Pension to take account of its early payment. If the contributions are not complete we will first calculate the proportion of the Additional Pension you have paid for and then apply the reduction for early payment.


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  41. Q. What happens if I die or retire early because of ill health?

    A. If it is less than 12 months since your employer received your application to buy Additional Pension we will return the additional contributions to you, or on your death to your personal representatives. If your employer bought the Additional Pension for you the money will be returned to them. 

    If it is more than 12 months you will be credited with the Additional Pension amount and all future additional contributions will be waived. If you die, this will only have effect if you have taken Additional Pension with dependants cover. Without dependants cover there is no increase to the long-term dependants benefit payable on your death.

    With cover for dependant’s each £250 unit of Additional Pension also increases your partner’s survivor pension by £93.75 a year. In the case of child allowance the increase is distributed according to the rules of that benefit.


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  43. Q. Is Additional Pension index linked?

    A. Yes, AP purchased is increased in line with monthly increases in the ate of inflation both before the Additional Pension comes into payment (“a pre-payment increase”) and also whilst it is being paid (“an in-payment increase”). If the application to buy Additional Pension was made: 

    • On or before 31 March 2011 – it will attract pre-payment increases in line with the Retail Prices Index (RPI) and in-payment increases in line with the Consumer Prices Index (CPI).
    • On or after 1 April 2011 – both the pre-payment and the in-payment increases will be in line with the CPI.
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  45. Q. Is Additional Pension subject to Income Tax?

    A. The NHS pension and any Additional Pensions you buy, are taxable income. Income tax is deducted from the pensions before they are paid.


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  47. Q. How do I apply to buy Additional Pension?

    A. The Additional Pensions Calculator on this website contains the application form. 

    Before applying think carefully about your retirement plans and work out how much Additional Pension you want to buy. The calculator will insert the amount and cost on the application form for you. Print the form, add your personal details and give it to your employer.

    If you have difficulties completing or printing the application form ask your employer to help you.

    Do not delay your application because the cost may be affected


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