The NHS Pension Scheme is one of the most valuable parts of the NHS reward package. It is a defined benefit scheme: your pension is based on your career average earnings, not on investment performance. In return, members pay a contribution set by a tiered table based on actual annual pensionable pay.
Contribution tiers from 1 April 2026
Up to £13,259 you pay 5.2%. From £13,260 to £28,854 you pay 6.5%. From £28,855 to £35,155 you pay 8.3%. From £35,156 to £52,778 you pay 9.8%. From £52,779 to £67,668 you pay 10.7%. Above £67,669 you pay 12.5%.
Unlike income tax, your tier rate applies to the whole of your pensionable pay, not just the slice above each threshold. A Band 6 nurse on £42,170 pays 9.8% on all of it — about £4,133 a year, or £344 a month before tax relief.
Since 2024 the tiers are based on your actual earnings rather than whole-time equivalent pay, which lowered contributions for many part-time staff. The thresholds are uplifted each April in line with CPI inflation (3.8% for 2026/27) so that annual pay awards do not push staff into higher tiers.
Tax relief: the real cost is lower
NHS Pension contributions are taken under a net pay arrangement — they are deducted from your pay before income tax is calculated, so you automatically get tax relief at your highest rate. For a basic-rate taxpayer, a £100 contribution reduces take-home pay by only £80; for a higher-rate taxpayer, by £60.
Contributions do not reduce National Insurance, which is calculated on your full gross pay.
Is it worth staying in?
For almost everyone, yes. The employer contributes 23.7% of pay on your behalf, and benefits are index-linked and guaranteed for life. Opting out saves the contribution now but gives up an employer-backed benefit that is extremely expensive to replicate privately. This page is general information, not financial advice — if you are considering opting out, speak to an independent financial adviser first.