Start planning now for a long and enjoyable retirement.
Ensuring members of the nursing family have access to good quality occupational pension provision has been identified by the RCN as a key strategic aim.
As life expectancy increases and pension values change, it is more important than ever to make sure you plan for your retirement. There are three main types of pension provision:
- State pension - when you are working your National Insurance contributions are counted towards your future State Pension entitlement;
- Occupational pension - depending on where you work, different occupational pension options are also available to help you save for your retirement, e.g. NHS Pension;
- Private pension - from a bank or other financial provider.
The State Retirement Pension
The State Pension is a regular payment made by the UK Government to people who have reached State Pension age. This is to ensure that everyone has a foundation for their retirement income to support them in their old age. State Pensions are funded from National Insurance (NI) contributions.
Your State Pension age is based on your gender and age. Find out more about your State Pension age.
A briefing paper outlines current issues relating to the equalisation of the state pension age between men and women, including details of a campaign led by the Women Against State Pension Increases (WASPI) and associated activities.
NHS Pension Scheme
The NHS Pension scheme is the occupational pension scheme for employees working for the NHS or for an organisation providing NHS services. A significant majority of RCN members are active, deferred or retired members of the NHS Pension. We recognise the value of the NHS Pension scheme, not just as deferred pay for our members in their retirement, but as a key component of the overall NHS reward package and its importance to recruitment and retention. As such we are committed to working collectively and in partnership with Government and employers to ensure the scheme remains one that is stable and secure, and that it provides the best possible benefit to current and future members.
There are three NHS Pension schemes across the four UK countries. Further sources of information are as follows:
England and Wales - NHS Business Services Authority (NHSBSA)
Northern Ireland - HSC Pension Service
Scotland - Scottish Public Pensions Agency
Current national issues in the NHS Pension Scheme
Age Discrimination in the NHS Pension Scheme
Recent legal cases (McCloud/Sargeant – Firefighters and Judiciary) ruled that the way in which public service pension scheme members were moved to the new 2015 Pensions Schemes was discriminatory on grounds of age.
This discriminatory effect now must be removed and will mean pension scheme members having to choose how they want their pension to be calculated for the period 1 April 2015 to 31 March 2022.
The choice will be between benefits calculated under the rules of the scheme someone was in immediately before April 2015 (their legacy scheme) or under the 2015 Scheme rules(their reformed scheme).
Following their public consultation in 2020, HM Government published their response in early February 2021 and confirmed their intentions on how they will deliver the remedy.
In short, the response confirms that Government will take the “deferred choice” option, meaning that remedy will be determined once someone claims their pension benefits at retirement. In the years prior to retirement, members will receive two figures in their Annual Pension Benefit Statement/Total Reward Statement showing the two different calculations for the remedy period. Those scheme members who have had a pension event (e.g. have taken retirement or transferred out of the scheme) during the remedy period (2015 – 2022) will have their pension recalculated in line with remedy requirements. However, nothing will change until legislation is passed and no-one is required to take any action at this stage.
The NHS Pension Scheme for England and Wales has produced a member briefing that can be found here.
The Scottish Public Pensions Agency will presumably publish information on its website in due course.
The outcome of the Northern Ireland Department of Finance consultation on this matter has not yet been published but is likely to follow soon and confirm a similar approach.
No-one is being asked to, or is able to, make this choice yet.
HM Government response also confirmed that ALL active pension scheme members will move to the 2015 schemes from 1st April 2022 for all future pension benefit accrual.
Other workplace or occupational pensions
If you work for a Local Authority you should have access to the Local Government Pension Scheme.
University staff are covered by the Universities Superannuation Scheme.
If you are working elsewhere, for example in the independent sector, you may have the option to pay into a pension scheme arranged by your employer that both you and your employer make contributions into.
Since 2012 all employers are required by law to offer a workplace pension to eligible staff. Eligible staff are automatically enrolled into a workplace scheme but can subsequently opt out if they wish to. Both employers and staff pay into the scheme and staff receive tax relief on their contributions.
Some, but not all, workplace pension schemes make provision for employees who have to leave work early due to redundancy or ill health and also pay life assurance benefits. Your employer should be able to provide specific guidance on the benefits available.
For more information on your specific occupational or workplace pension, speak to your manager or your employer's payroll or human resources department.
Private pension provision
Private pensions are like workplace pensions but are set up by you rather than your employer. You can set up regular contributions, e.g. monthly, or make one-off payments into your fund. Your pension provider will add any necessary tax relief.
The money you put into your personal pension will usually be invested in a range of assets like shares, bonds, property and cash. When you start your pension, you'll probably get a choice of pension funds to select from, based on how much risk you are willing to take.
When you reach the age of 55, you can take your private pension as a lump sum, use it to buy an annuity (a guaranteed income) or leave it invested and take out cash amounts when you need to via drawdown.
Further advice about pensions can only be given by regulated financial advisers or institutions. Lighthouse is the RCN's preferred partner for financial advice but other services are available.
You can also find out more from the Pensions Advisory Service.
As an RCN member, you can find answers to your questions about work - and more - in our comprehensive advice. You can also find out how to contact the advice team.