Is the NHS Pension worth it? What it costs and what you get
The short answer: for almost all NHS staff, yes. Your employer adds 23.7% of your pay on top of what you pay in, and every year you’re a member adds a guaranteed pension for life that keeps pace with inflation. A Band 5 on the entry step pays about £2,130 a year after tax relief and gets about £594 a year of pension, so they get that year’s cost back in under 4 years of retirement, and the pension carries on for life.
What it costs you and what you get, by band
| Band (entry step) | Your rate | You pay | Cost after tax relief | Employer pays | Pension added this year |
|---|---|---|---|---|---|
| Band 2 | 6.5% | £1,643 | £1,314 | £5,989 | £468 a year |
| Band 3 | 6.5% | £1,674 | £1,340 | £6,105 | £477 a year |
| Band 4 | 6.5% | £1,845 | £1,476 | £6,729 | £526 a year |
| Band 5 | 8.3% | £2,662 | £2,130 | £7,601 | £594 a year |
| Band 6 | 9.8% | £3,916 | £3,133 | £9,470 | £740 a year |
| Band 7 | 9.8% | £4,840 | £3,872 | £11,705 | £915 a year |
| Band 8a | 10.7% | £6,155 | £3,693 | £13,634 | £1,065 a year |
England and Wales, full time, 2026/27. “Cost after tax relief” is how much less you take home because of your contribution. The pension column is the yearly pension, for life, that one year of membership adds, before it’s increased for inflation.
For every £1 it costs you, your employer puts in roughly £3 or more. You won’t find a workplace pension in the private sector that comes close: most pay the auto-enrolment minimum of 3% of earnings above a threshold.
How the pension builds up
The 2015 scheme is a career average scheme. Each year:
- You build up 1/54th of your pensionable pay for that year. On £32,073, that’s £594 a year of pension.
- Everything you’ve built up so far is increased by inflation (CPI) plus 1.5%, every year you stay a member. So it grows faster than prices.
- Unsocial hours and part-time extra hours count as pensionable pay, so they build pension too. Full-time overtime doesn’t.
Thirty years on Band 5 entry pay, ignoring promotions and pay awards, builds up a pension of about £22,296 a year in today’s money, paid for life and increased with inflation once it’s being paid. Most people move up bands over a career, so their pension ends up higher. You can swap some pension for a tax-free lump sum: £12 of lump sum for every £1 a year of pension you give up.
What else you get
- Death in service: a lump sum of twice your pensionable pay if you die while a member, plus pensions for a partner and eligible children.
- Ill-health retirement: if you can’t work because of ill health, you may get your pension early without the usual reduction, and in some cases with extra years added.
- Guaranteed income: the pension doesn’t depend on investments, so it won’t fall if the stock market does.
Should you ever opt out?
Opting out gives you more take-home pay now, about £177 a month for a Band 5 on the entry step. In exchange you give up the £7,601 your employer would pay in that year, the £594 a year of pension, and the death in service and ill-health cover. It’s rarely worth it. Cases where people think about it:
- Short-term money problems. It might help for a few months, but get advice first. Your employer must re-enrol you every three years, and you can rejoin any time.
- Very high earners near the annual allowance. Some senior doctors and managers face pension tax charges. That’s complicated and needs specialist advice, not a quick opt-out.
- Planning to leave the UK permanently before two years’ membership. With less than two years, you may get a refund of your own contributions instead of a pension.
The tiered contribution rates can feel steep, especially when a pay rise or extra shifts push you into the next tier. But the tier rate is the gross cost; after tax relief, and against what your employer adds, the scheme is still far better value than saving the money yourself.
When you can take it
Your normal pension age in the 2015 scheme is your State Pension age, currently between 66 and 68. You can retire from 55 (57 from April 2028), but your pension is reduced for each year it’s paid early, roughly 5% a year. If you’re made redundant from the NHS or retire through ill health, different rules apply. If you have service before April 2015, you may also have a 1995 or 2008 section pension with an earlier pension age.
To see your own projection, including older sections and early retirement, use the NHS Pension calculator. To see what contributions take from your pay, try the NHS pay calculator, and for a broader view, our guide to pension savings by age.
Figures use NHS Pension Scheme (England and Wales) contribution tiers and the 23.7% employer rate for 2026/27, 2015 scheme rules, and 2026/27 Income Tax. This is general information, not financial advice.
Common questions
Is the NHS Pension worth it?
For almost everyone, yes. Your employer pays 23.7% of your pay into it, on top of your own contribution, and each year adds a guaranteed, inflation-linked pension of 1/54th of that year’s pay. A Band 5 on the entry step pays about £2,130 a year after tax relief and builds up about £594 a year of pension for life.
Should I opt out of the NHS Pension?
Usually not. Opting out gives you a few pounds more a month now, but you lose the employer contribution, the pension you would build up, and cover such as the death in service lump sum and ill-health pension. If money is very tight, it is worth talking to your pensions team or a union rep before opting out.
How much NHS Pension will I get?
Each year you build up 1/54th of your pensionable pay for that year, which is then increased every year by inflation plus 1.5% while you are still a member. Thirty years on Band 5 entry pay would build up roughly £22,000 a year in today’s money, before any lump sum.
When can I take my NHS Pension?
Your normal pension age in the 2015 scheme is your State Pension age, currently 66 to 68. You can take it from 55 (57 from April 2028) but it is reduced for each year it is paid early.
What happens to my NHS Pension if I leave the NHS?
If you have been a member for at least two years, the pension you have built up stays in the scheme and is increased by inflation each year until you take it. If you rejoin within five years, it goes back to growing at inflation plus 1.5%.