NHS Pension & leaving the NHS.

B0bbyEwing

Basically wondering what happens to your NHS pension should you leave. Not to opt out, not to retire but to leave - to work for a different employer. 

I understand that many workplace pension schemes work the same. Work for this local employer, that one, the one man band down the road & you're being enrolled in to something likely with NEST, The People's Pension, NOW Pensions & similar. Leave one employer & can transfer that pension pot across to your new employers scheme if you want. 
I understand they all built 'a pot' which you take from in retirement. 

There'll be terms for this, DBs and DCs and whatever others I see scattered about the forums. I have a loose understanding of how they operate, not all the jargon that goes with it. 

But I understand the NHS pension operates differently to what I just mentioned. 


OH is considering leaving her NHS role & working for a 1-man-band kind of setup so will be back in to something like NEST if she chooses to go down that road. 
She started with the NHS in 2022 & if she follows this offer up then she will have left this year. 

What happens to that NHS pension? And how does it work? 

Dazed_and_C0nfused

B0bbyEwing said:

Basically wondering what happens to your NHS pension should you leave. Not to opt out, not to retire but to leave - to work for a different employer. 

I understand that many workplace pension schemes work the same. Work for this local employer, that one, the one man band down the road & you're being enrolled in to something likely with NEST, The People's Pension, NOW Pensions & similar. Leave one employer & can transfer that pension pot across to your new employers scheme if you want. 
I understand they all built 'a pot' which you take from in retirement. 

There'll be terms for this, DBs and DCs and whatever others I see scattered about the forums. I have a loose understanding of how they operate, not all the jargon that goes with it. 

But I understand the NHS pension operates differently to what I just mentioned. 


OH is considering leaving her NHS role & working for a 1-man-band kind of setup so will be back in to something like NEST if she chooses to go down that road. 
She started with the NHS in 2022 & if she follows this offer up then she will have left this year. 

What happens to that NHS pension? And how does it work? 

From the schemes normal pension age (likely her own State Pension age) she will be entitled to receive the pension she has accrued during her period of service.

She can take it earlier than that if she wishes but it would be reduced to reflect the fact that she wanted it paying for a longer period.  The reduction is typically around 5% for each year she takes it early.

The NHS pension she has accrued will revalued each April, by the previous Septembers CPI rate, so it keeps up with inflation.

She cannot transfer it elsewhere.  Which is a good thing really, to have some guaranteed pension income in addition to her State Pension.

Marcon

B0bbyEwing said:

Basically wondering what happens to your NHS pension should you leave. Not to opt out, not to retire but to leave - to work for a different employer. 

I understand that many workplace pension schemes work the same. Work for this local employer, that one, the one man band down the road & you're being enrolled in to something likely with NEST, The People's Pension, NOW Pensions & similar. Leave one employer & can transfer that pension pot across to your new employers scheme if you want. 
I understand they all built 'a pot' which you take from in retirement. 

There'll be terms for this, DBs and DCs and whatever others I see scattered about the forums. I have a loose understanding of how they operate, not all the jargon that goes with it. 

But I understand the NHS pension operates differently to what I just mentioned. 


OH is considering leaving her NHS role & working for a 1-man-band kind of setup so will be back in to something like NEST if she chooses to go down that road. 
She started with the NHS in 2022 & if she follows this offer up then she will have left this year. 

What happens to that NHS pension? And how does it work? 

See https://www.nhsbsa.nhs.uk/sites/default/files/2025-07/Leaving%20Early%20and%20Transferring%20Out%20Guide%20%28V18A%29%2004.2025.pdf especially page 6, which summarises the position.

Dazed_and_C0nfused said:

She cannot transfer it elsewhere.  Which is a good thing really, to have some guaranteed pension income in addition to her State Pension.

She can transfer it, but only to another 'defined benefit' arrangement.

Silvertabby

Marcon said:

B0bbyEwing said:

Basically wondering what happens to your NHS pension should you leave. Not to opt out, not to retire but to leave - to work for a different employer. 

I understand that many workplace pension schemes work the same. Work for this local employer, that one, the one man band down the road & you're being enrolled in to something likely with NEST, The People's Pension, NOW Pensions & similar. Leave one employer & can transfer that pension pot across to your new employers scheme if you want. 
I understand they all built 'a pot' which you take from in retirement. 

There'll be terms for this, DBs and DCs and whatever others I see scattered about the forums. I have a loose understanding of how they operate, not all the jargon that goes with it. 

But I understand the NHS pension operates differently to what I just mentioned. 


OH is considering leaving her NHS role & working for a 1-man-band kind of setup so will be back in to something like NEST if she chooses to go down that road. 
She started with the NHS in 2022 & if she follows this offer up then she will have left this year. 

What happens to that NHS pension? And how does it work? 

See https://www.nhsbsa.nhs.uk/sites/default/files/2025-07/Leaving%20Early%20and%20Transferring%20Out%20Guide%20%28V18A%29%2004.2025.pdf especially page 6, which summarises the position.

Dazed_and_C0nfused said:

She cannot transfer it elsewhere.  Which is a good thing really, to have some guaranteed pension income in addition to her State Pension.

She can transfer it, but only to another 'defined benefit' arrangement.

Which would almost certainly be limited to another public sector employer, such as Local Government or the Civil Service.

hugheskevi

Something that may not be immediately obvious about leaving is the impact it has on accrued pension.

Although accrued pension increases in line with CPI after leaving, if remaining in employment that same accrued pension would increase by CPI+1.5% each year.

The loss of 1.5% every year compounded over many years is a very large reduction to the value of the accrued pension due to leaving compared to remaining in service. This is sometimes referred to as 'golden handcuffs.' With only a few years of service that will fortunately be a fairly small effect in this case in absolute terms, although the percentage loss will be large if she is young.

Moonwolf

Just to add, you can’t predict what CPI will be but for example

I left the NHS in 1998 and my pension was worth £2668 a year, it is now worth £5601 and I am claiming it this year. It roughly means I can buy the same things today as I would have been able to buy with £2668 in 1998.

The scheme was a slightly different one but the growth for people who have left is CPI for both the current and old schemes.

B0bbyEwing

Thanks.

Financially speaking my opinion is that she would be better off remaining where she is. But there's more than 1 factor in the decision and a good pension, while good, is still only 1 factor. Mental wellbeing is another factor & when there's 20-25 years remaining it becomes a little hard to ride it out. I can put up with a carp job & a carp toxic environment because that's all I've ever known so I'm conditioned to it. Am I saying that makes me better? No certainly not. If anything it makes me worse. 

The money in the here & now will be barely any different. Slightly less per hour, slightly more hours so at the end of the day the decision needs to be what she's most comfortable with & will make her happiest. 

Pension is just 1 factor but it's something she's never really paid much mind to beyond "I hear NHS pension is good" like many other people. So I'm trying to find out how good, how it works, what happens should she leave so that she'll have this information & can use it for her decision.

And nope, that's not to try sway her 1 way. Like I said, there's many factors & she needs to be happy.

GrubbyGirl_2

The NHS is a huge employer with many different employers and roles.  If she's not happy in her current job, maybe it's time to look for a new one in a different part of the NHS

Andy_L

hugheskevi said:

Something that may not be immediately obvious about leaving is the impact it has on accrued pension.

Although accrued pension increases in line with CPI after leaving, if remaining in employment that same accrued pension would increase by CPI+1.5% each year.

The loss of 1.5% every year compounded over many years is a very large reduction to the value of the accrued pension due to leaving compared to remaining in service. This is sometimes referred to as 'golden handcuffs.' With only a few years of service that will fortunately be a fairly small effect in this case in absolute terms, although the percentage loss will be large if she is young.

I'm fairly sure that if you transfer the pension to another public sector scheme then you keep the extra 1.5%.

hugheskevi

Andy_L said:

hugheskevi said:

Something that may not be immediately obvious about leaving is the impact it has on accrued pension.

Although accrued pension increases in line with CPI after leaving, if remaining in employment that same accrued pension would increase by CPI+1.5% each year.

The loss of 1.5% every year compounded over many years is a very large reduction to the value of the accrued pension due to leaving compared to remaining in service. This is sometimes referred to as 'golden handcuffs.' With only a few years of service that will fortunately be a fairly small effect in this case in absolute terms, although the percentage loss will be large if she is young.

I'm fairly sure that if you transfer the pension to another public sector scheme then you keep the extra 1.5%.

That is correct, in relation to post-2015 CARE schemes. The amount transferred in is ring-fenced in the receiving scheme as part of an inner-club Transfer Club transfer, and the in-service revaluation rate from the original scheme is applied.

Universidad

Moonwolf said:

It roughly means I can buy the same things today as I would have been able to buy with £2668 in 1998.

An esoteric point, that a lot of people seem to disagree with, but it doesn't mean that (even roughly). 

It does mean that you can continue to spend the way that people spend on average, to the same degree. 

But it doesn't mean that you can buy the same things.

Inflation doesn't (try to) account for the way that people's spending habits change over time, even when people's spending habits change because things are getting more expensive. 

The inflation basket contains what has been calculated to be an average way that people spend, and you can argue about the methodology, or talk about personal inflation all day - but fundamentally if people stop buying steak because steak becomes too expensive for the average person to buy, then it drops out of that basket, and you will no longer be able to buy the same amount of steak with your income, even if it always matches inflation.