NHS pension query - effect of reducing houra

techwatcher

Hi,

Asking on behalf of a friend. She has worked full time as a nurse in the NHS since 1986 and is a member if the NHS Pension Scheme.

She is considering reducing her working hours and is interested in how such a move would edict her pension?

Are the 1995/2008 Scheme and the 2015 Scheme considered as separate schemes? Would a reduction in working hours now just affect the benefits accrued under the 2015 Scheme?

Any insights would be much appreciated.

Dazed_and_C0nfused

techwatcher said:

Hi,

Asking on behalf of a friend. She has worked full time as a nurse in the NHS since 1986 and is a member if the NHS Pension Scheme.

She is considering reducing her working hours and is interested in how such a move would edict her pension?

Are the 1995/2008 Scheme and the 2015 Scheme considered as separate schemes? Would a reduction in working hours now just affect the benefits accrued under the 2015 Scheme?

Any insights would be much appreciated.

Yes.  The 1995 and 2008 schemes are final salary and it is the full-time equivalent salary that counts.

https://www.rcn.org.uk/Get-Help/RCN-advice/nhs-pension

Purplelady65

For the purpose of calculating the pension the full-time salary is used but the service is compressed. Additional service can’t now be added to the 1995 or 2008 schemes so when the pension is calculated for these pensions they will calculate it on the whole time equivalent salary (assuming the final salary link applies) when your friend retires and for the 1995 scheme will calculate the best year from the previous 3 years. For the 2015 scheme if your friend had 5 years service in the pension scheme and then reduced her hours to half time if she then worked for five years this would be the equivalent of 2.5years service so a total of 7.5 years compared to 10 years if she continued to work full time. 

techwatcher

Purplelady65 said:

For the purpose of calculating the pension the full-time salary is used but the service is compressed. Additional service can’t now be added to the 1995 or 2008 schemes so when the pension is calculated for these pensions they will calculate it on the whole time equivalent salary (assuming the final salary link applies) when your friend retires and for the 1995 scheme will calculate the best year from the previous 3 years. For the 2015 scheme if your friend had 5 years service in the pension scheme and then reduced her hours to half time if she then worked for five years this would be the equivalent of 2.5years service so a total of 7.5 years compared to 10 years if she continued to work full time. 

Many thanks for the very clear explanation - appreciate it. I will pass this on to my friend.

rockers

It sounds like your friend is in the Special Class status of NHS pension.

For Mrs Rockers, this meant that there was little difference between taking her pension at age 55 or age 60.; so she took it at age 55.

There were two options of either a higher lump sum and lower pension or lower lump sum and higher pension.
She chose the former.
Originally, if she chose to take the pension but continued to work for the NHS then her pension would be counted as part of her salary but they have changed this so anything she earns is in addition to her pension.

So she continues to work for NHS but reduced her hours from 30 hours per week to 22.5 hours per week.

There is also the Mccloud judgment on her remaining pension. I'm not sure yet if this has reached a conclusion but here is some information from NHSBA from 2022.

I have provided information below how the 1995 Section and 2015 Scheme Pension is calculated.

Each pension pot is calculated differently. 

Read how an NHS pension is calculated for officer members of the 1995 Section on our online knowledge base.

In a Career Average Revalued Earnings (CARE) scheme, your pension is based on your pensionable pay throughout your career.

Your pension is calculated for each year separately then increased by a set revaluation rate which is linked to inflation.

Read more on our online knowledge base.

If you’re affected by the changes to public service pension schemes, your service between 1 April 2015 and 31 March 2022 will be placed into your legacy scheme. This will happen in October 2023.

When it’s time for you to claim your pension benefits, you’ll be asked if you want to receive legacy scheme or reformed scheme pension benefits for your service between 1 April 2015 and 31 March 2022.

We’ll contact all affected members directly when action needs to be taken.

Read more about the changes to your pension on our website.

worklifebalance2025

I have been trying to get advice on this for a while to no avail. I understand I cant be given a specific amount of how much my pension will be affected if I drop my hours from 37.5 to 28.5 but am trying to figure out how big a hit I will take if I do drop my hours as cant make a decision until I have the information. I am 58 and in the 2008 and 2015 scheme and useless at understanding pensions so need advice, even the NHS pensions dept couldn't/wouldn't advise. Also Does the 2008 still base your pension on the best of the last ten years salary as this may be the decider? any advice much appreciated or if anyone can just point me in the right direction for some sound advice...thankyou in advance 

Dazed_and_C0nfused

worklifebalance2025 said:

I have been trying to get advice on this for a while to no avail. I understand I cant be given a specific amount of how much my pension will be affected if I drop my hours from 37.5 to 28.5 but am trying to figure out how big a hit I will take if I do drop my hours as cant make a decision until I have the information. I am 58 and in the 2008 and 2015 scheme and useless at understanding pensions so need advice, even the NHS pensions dept couldn't/wouldn't advise. Also Does the 2008 still base your pension on the best of the last ten years salary as this may be the decider? any advice much appreciated or if anyone can just point me in the right direction for some sound advice...thankyou in advance 

Why do you think changing your hours might have an impact on your 2008 pension?

If the standard FTE hours in the NHS are 37.5 and you reduce your hours to 28.5 then you will accrue 76% of the pension you would otherwise have done in the 2015 scheme.

For example, say your salary was £30,000 so you accrued £555.55 each year (whilst your salary was £30,000).

If you drop to 28.5 hours I would expect your (actual) salary to be £22,800.  And you would accrue £422.22 pension each year (whilst your actual salary was £22,800).

Do you think the answer is any different to this?

infj

worklifebalance2025 said:

I have been trying to get advice on this for a while to no avail. I understand I cant be given a specific amount of how much my pension will be affected if I drop my hours from 37.5 to 28.5 but am trying to figure out how big a hit I will take if I do drop my hours as cant make a decision until I have the information. I am 58 and in the 2008 and 2015 scheme and useless at understanding pensions so need advice, even the NHS pensions dept couldn't/wouldn't advise. Also Does the 2008 still base your pension on the best of the last ten years salary as this may be the decider? any advice much appreciated or if anyone can just point me in the right direction for some sound advice...thankyou in advance 

There's no shame in being confused - it is complicated particularly as you will also be affected by the McCloud judgement. Have you seen your Total Reward statement for 2024/2025 yet? Mine had 2 sets of options, 1 without McCloud and one with - the difference was surprising! Does your employer offer any online sessions about pensions? It's really worth trying to attend one if you can.
You are the same age as me but I am in the 1995 scheme so slightly different options.
The 2008 scheme has a normal pension age of 65 so you are already within the 10 years (and I don't think it would make any difference to the 2008 section of the scheme that you have already earned anyway).
What it would make a difference to is the 2022 onwards scheme which is an accrual scheme. Basically you accrue an amount towards your pension each financial year  from 2022 (based on your salary and hours worked).
The normal pension age for that scheme is your state pension age, so I'm guessing 67 or 68?
So if you decided to work fulltime to 65 and then take your pension, you would be working another 7 years and accrue pension each year in the 2022 scheme. Then at 65 you take your 2008 pension plus your 2022 pension if you wish. Or you can delay taking the 2022 pension until state pension age.

So if you reduce hours it will inevitably reduce how much goes into the 2022 pension each year - as Dazed and confused says - in effect by 24%. So if from now you only worked the reduced hours until 65, you would only accrue the equivalent of 5 and a bit years into the pension instead of 7 years. But it will make no difference to the 2008 section as far as I know.
Only you can know if that will be enough money for your lifestyle.

I can only say that I reduced my NHS working hours a couple of years ago - and it was the best thing I have ever done