Pensions and retirement

The information we provide 

As life expectancy increases and pension arrangements and values change, it is more important than ever to ensure that you make adequate provision for what will hopefully be a very long and enjoyable retirement.

Our information covers the three main types of pension. These are:

  • state retirement pension
  • occupational pension
  • private pension (including investments).

This information cannot be used as advice on any course of action to take, or not to take. We recommend that you take independent financial advice on your retirement planning needs and arrangements. This may include using the services of Lighthouse Financial Advice through RCN Xtra.

The basic state pension is a regular payment from the government, which you receive when you reach state pension age (SPA) if you have paid or been credited with sufficient national insurance contributions.

Pre 1995 women were able to receive their state pension earlier than men. The Pensions Act 1995 provided for the SPA for women to equalise with the SPA for men over the period April 2010 to 2020. However, legislation passed in 2011 accelerated the timetable for equalisation. 

Many women affected by this quicker timetable have been campaigning against the change: the accelerated timetable and the fact that they say the change was not communicated effectively such that all those affected fully understood that their state pension age was rising and that they would not receive their state pension until later. For information about the WASPI’s campaign on the equalisation of state pension age please read more here

In April 2016 the government introduced a flat rate (single-tier) State Pension for everyone who reached their state pension age on or after that date.  They also changed the timetable that raises the State Pension Age (SPA) from 66 to 67 gradually between 2026 and 2028. Under the current law SPA will already increase to: 

  • 67 between 2034 and 2036
  • 68 between 2044 and 2046

As part of this change to the state pension, the Government ended National Insurance Contracting out arrangements. This meant that members of what were known as “contracted out pension schemes”, like the NHS pension, now pay on average 1.4% more in NI than they used to (employers will also pay more for their affected employees). The reason for this is that there is no longer a second element to the state pension that people in contracted out schemes previously didn’t pay into (e.g. SERPS and the State Second Pension).

When someone claims their state pension, the Department for Work and Pensions (DWP) works out a 'starting amount' (the amount of State Pension the member will be deemed to have earned up to 6 April 2016) and adds this to the contribution history they have built up since the change took place.

This "starting amount" will be the better of the state pension:

  • an individual has already built up under the old rules or
  • the individual would have built up by 6 April 2016 had the new rules applied for their whole career to date.

In both cases, a deduction will be made to reflect any periods when the individual was contracted-out of the additional state pension. This will then be added to by any further years of NI contributions until the pension is claimed.

To help individuals understand how this will affect them, the DWP can provide a written estimate of the starting amount on request. This service is available to anyone over the age of 55. A State Pension estimate can be requested by phone on 0845 3000 168 or by completing form BR19 available here

The DWP has also released some more general information on the changes. This includes a number of videos branded the “PensionTube” and factsheets.

DWP’s own figures show that the majority of people reaching state pension age after 2016 will be worse off under this new arrangement, so it is vitally important that members seek information about their future income so they can make plans accordingly.

This is a way of saving for your retirement that’s arranged by your employer. Normally both you and your employer make contributions to the scheme. The money paid into the pension scheme is used to pay you an income after retirement. Please visit for more information on workplace and personal pensions. Further information regarding your specific occupational pension can be obtained from your employer's payroll or human resources department.

Many occupational pension schemes make provision for employees who have to leave work early due to redundancy or ill health and also pay life assurance benefits. Employers should provide specific guidance on these matters.

The Pensions Act 2008 established new duties on employers to enrol some or all of their workers into a pension scheme that meets certain legal standards as a way of increasing pensions savings. Auto enrolment refers to the process where the employer automatically signs up eligible workers into a pension scheme or similar savings scheme. This is in addition to any state pension retirement benefit.

Employees and employers make payments into the scheme and the Government also contributes in the form of tax relief.

Employers can choose any scheme that meets the necessary criteria and employees can opt out of the auto-enrolled pension provision. Please see for more information.

The NHS Pension Scheme is the occupational pension scheme for employees working for the NHS or for an organisation providing NHS services.

Following some changes in April 2015 there are now two schemes:

  • 1995/2008 Pension Scheme (the “old” scheme) – closed to new entrants
  • 2015 Pension Scheme (the “new" scheme) – everyone without full transitional protection will be or will soon become a member of this scheme.

The NHS Business Services Authority (NHSBSA) website has information on the NHS pension scheme for members in Wales and England. If you are a member of the scheme applicable in Northern Ireland, see the HSC Pension Service website for more information. If you are a member of the scheme applicable in Scotland, see the Scottish Public Pensions Agency website for more information.

For more information about transitional protection please read the 2015 NHS Pension Scheme Changes Briefing and visit your pension provider’s website. Information regarding contribution rates is also available on these websites. Please note that a substantive change to salary, including after a pay award,  can lead to pension scheme members moving to a different tier of pension contribution, and if a member earns more or less in a tax year than the tier they were allocated to, their tier will be changed for the next tax year.

Nurses and midwives who were members of the NHS Pension scheme on or before 6.3.95 may have retained rights to retire from the age of 55 without the usual reduction in pension caused by early payment.  This is known as having Special Class Status.

The amount of pension paid in retirement depends on the number of years someone pays in and their salary. The 1995/2008 Scheme is a final salary scheme that calculates benefits according to the best of the last years’ salary before retirement (best of the last 3 years for 1995 section members, and a salary derived from the best 3 of the last 10 years for 2008 section members). The 2015 scheme is a Career Average scheme, meaning that benefits for each year accrue according to the salary in that year. Member who are in dispute with their pension administrator over the number of years’ worth of contributions they have made should know that records of all contributions and refunds are kept by administrators until a member’s retirement. So it is worth asking for a statement from theses archived or microfiche files.

For the purpose of auto enrolment in the NHS, workers are categorised into one of three categories: eligible jobholder, non-eligible jobholder or entitled worker. This is done by assessing age, worker status and qualifying earnings. For more information please see the NHS Employers information on auto-enrolment.

If the worker has two roles with separate NHS employing organisations (with separate PAYE references) both organisations are legally required to assess the worker under automatic enrolment legislation. If the employee has a whole time substantive job and also has a zero hours/bank arrangement with the same employer, the two arrangements can either be aggregated as a ‘single employment relationship’ with the pensionable hours capped at normal whole time hours, within NHSPS rules.

Staff who are transferred out of direct NHS employment to another employer under a TUPE transfer are now generally able to stay in the NHS pension scheme. Previously TUPE regulations only required that a broadly comparable pension be provided by the new employer. New Fair Deal Guidance, published in October 2013 by HM Treasury is available at This confirms how staff whose employment is transferred under TUPE can retain membership of their current public sector scheme New Fair Deal will apply in the majority of cases; if your employer is suggesting that it does not apply, please contact us.

Widening access

The national social partnership forum has developed the terms of access to the NHS pension scheme for non-NHS organisations providing NHS clinical services (IPs), in situations where staff are employed by the IP, but have not transferred from the NHS (and so are not covered by New Fair Deal). This is called ‘Access’.

These terms allow access to the NHS pension scheme where IPs deliver services under an Alternative Provider Medical Services (APMS) contract, an NHS Standard contract, or a Local Government contract in relation to public health services - including services procured under 'Any Qualified Provider' - and covers both clinical and non-clinical staff delivering a ‘clinical service’. These arrangements came into force 1 April 2014.

Under the arrangements can decide if they wish to offer the NHS scheme to their staff delivering clinical services. If they do wish to IPs can choose from two levels of access.

Level one: access for existing members. IPs are required to auto-enrol into the NHSPS:

  • from the date of commencement as an NHSPS employing authority, all existing eligible staff who were entitled to participate in the NHSPS at any time in the previous 12 months, and
  • from the date of recruitment, all new eligible staff who were entitled to participate in the NHSPS at any time in the 12 months before joining the IP. Staff should be 'wholly or mainly' engaged in delivering NHS ‘clinical services’ to retain access.

Level two: access for all eligible staff. IPs are required to offer access to all staff who are eligible to join the NHSPS and are 'wholly or mainly' engaged in NHS work. Further information is available on the NHS Employers website.

Contributions made into occupational pension schemes are usually exempted from income tax, i.e. they are paid from salary before tax is calculated and deducted. However, once they are in payment, such pensions are taxed as any other income would be according to the current tax thresholds.

High earners and those with large pension pots need to be aware of particular aspects of pension taxation. For more information, please see

In December 2019 NHS England made a contractual offer to registered clinical staff (including nurses) in England affected by Annual Allowance taxation in tax year 2019/20 – for more information on this please read the RCN briefing.  Members in Wales, Scotland and Northern Ireland affected by Annual Allowance taxation charges should consult their employer about possible steps to mitigate the tax charge.

Pensions and planning for retirement are both areas that require specialist advice. If you are considering alternative pension arrangements or additional pensions, then you may benefit from talking to an professional financial adviser. As a member of the RCN you are entitled to a complimentary, no obligation financial review from Lighthouse Financial Advice.

Lighthouse can provide advice to overseas RCN members provided they are paying UK income tax. Please have your UK National Insurance and RCN membership number ready.

The first port of call for any problems relating to your pension should be the pension provider themselves or the Department for Work and Pensions (DWP)/Social Security if this relates to the state pension. Many secondary sources of advice and/or support are only able to provide assistance once you have exhausted the dispute resolution process provided.

  • Financial Conduct Authority (FCA) regulates most firms and individuals that advise, sell and arrange financial products and services. Any financial advisers should be registered with the FCA
  • Pensions Advisory Service website is widely recognised as a leading source of free information, advice and guidance on company, personal and stakeholder schemes, including the miss-selling of a pension or lost pensions. They can also take on casework where there has been a dispute with a pension provider that may or may not lead to an investigation by the Pensions Ombudsman
  • Pensions Regulator supervises the pension industry and employers who administer pension schemes
  • Pension Ombudsman investigates complaints and disputes about the way that pension schemes are run, but can only take referrals once a pension scheme's dispute resolution process has been exhausted.

For more general advice and information you can contact one of the following:

Some companies are singling out pension savers and claiming that they can help them access their pension fund before their minimum pension age without any tax consequences. Promises of early cash are likely to result in serious tax consequences. If you access this type of scheme you are risking tax charges and penalties that could amount to more than half the value of your pension savings. Please be extremely cautious if you are contacted and always seek independent financial advice, never be rushed into making a pension transfer. RCN members can access professional financial advice from Lighthouse Financial Advice.

What to watch out for:

  • Websites encouraging visitors to access part of their pension fund immediately by transferring it into a new scheme, these sites are usually fraudulent and cost the UK more than half a billion pounds to date.
  • Unsolicited contact over the phone or via text message from companies offering a ‘loan’, ‘saving advance’ or ‘cash back’ from your pension.
  • Advisers or ‘introducers’ offering upfront cash incentives, who may be forceful or insistent on speedy decisions.
  • Not being informed about the potential reductions of your pension fund, tax charges and penalties.
  • Failure to provide the relevant documentation and information about the transfer, the terms and conditions and how your pension will be paid when you retire.

The Pensions Advisory Service has also produced guidance on this.

Also see the NHS Business Authority media article and the Pension Regulator website.

You can also call Action fraud (the UK’s national fraud reporting centre) on 0300 123 2040 if you think you have been made a fraudulent offer.

This network gives eligible members the opportunity to feed in to the important work of the National Pensioners Convention (NPC), which the RCN is affiliated with. The network is made up of RCN members who are over the age of 55 and receive a state or occupational pension. For more information please see the National Pensioners Convention Network page.

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Page last updated - 26/05/2021