Understanding how the NHS Pension System works is also a challenge.
There are different schemes included in this scheme which can be confusing for any common person.
But today in this blog post we will try to explain it to you in a very simple way.
NHS Pension Scheme (2015)
The 2015 Scheme is a Career Average Revalued Earnings (CARE) scheme.
Its based on your earnings throughout your entire NHS career.
Formula
Your Pensionable pay for the year ÷ 54 = Your pension for that year
Your Pensionable Pay
This is simply your gross/ basic pay that you earn in a scheme year.
Overtime is not included in this.
The Accual Rate (1/54th)
For Every year you work, you “bank” a pension equal to 1/54th of what you earned.
Consider it as setting aside a certain portion of your future retirement earnings.
Revalued
Here’s the most exciting aspect. The pension you accumulate annually doesn’t merely remain stagnant. It expands! Each year, the sum you’ve saved is “revalued” (enhanced) to ensure it retains its worth as time goes on. This growth is linked to inflation (the Consumer Price Index or CPI) along with an additional 1.5%.
Example
An NHS Nurse named Jemmy has a pensionable pay of £37,800 for the year.
Step 1 – Calculate this year’s pension slice
£37,800 ÷ 54 = £700
This means, Jemmy has added £700 to his annual pension pot this year.
Step 2 – Watch it grow
That £700 is now “Banked” and will be revealed every year until he retires.
NHS Pension Calculator
If you want to calculate your NHS Pension without having to understand all these calculations, you can use our “NHS Pension Calculator”.
This tool is absolutely Free and Easy to use.
NHS Pension Calculator