NHS Pension Scheme April 2025 Changes – New Rules and Reforms

What are the NHS Pension Scheme April 2025 Changes, and why should NHS staff care?

The NHS Pension Scheme introduced key updates from 1 April 2025. These changes cover:

• Contribution thresholds have been updated to reflect the CPI and Agenda for Change pay awards.

• Ensuring that extra hours worked by part-time employees are pensionable up to the whole-time equivalent (WTE).

• Clarified calculations during reduced pay or unpaid leave.

• Updates on GP pensionable profits, McCloud remedy, and neonatal care leave.

• Clear employer and employee action steps.

This piece explains each change, outlines practical implications for NHS professionals, and includes real-world guidance to help you act promptly. Expect active voice, bullet points, question-headings, tables, and FAQs throughout.

What changes have been made to NHS pension contribution thresholds from April 2025?

From 1 April 2025, the NHS pension scheme introduced updated contribution thresholds across England and Wales.

• The 1.7% increase in the Consumer Prices Index (CPI) as of September 2024 is reflected in these adjustments.
• Contribution rates have not changed, but band thresholds have been uprated to prevent members from moving into higher tiers due to inflation alone.

New contribution bands for England & Wales (2025/26)

(These went live 1 April 2025 and may be backdated if pay awards exceed CPI).

Will the NHS pension increase in April 2025?

Yes, NHS pensions in payment increased from April 2025 due to statutory indexation. According to the Pensions Increase (Review) Order 2025, public service pensions, including NHS pensions, rose by 3.1% in line with the Consumer Prices Index (CPI) for September 2024.

• Pension in payment uplift: +3.1% from 8 April 2025

• Applies to: Retirees from NHS 1995, 2008, and 2015 schemes

• Does not apply to: Benefits earned in the current tax year

This increase helps preserve the value of NHS retirement benefits against inflation.

How will this affect take‑home pay?

Although contribution rates remain the same, the change in thresholds may influence individual take-home pay based on where earnings sit relative to the revised bands.

Key Points:

• • Most members will remain within their existing tier due to the modest 1.7% uplift.

  • Take-home pay may slightly increase, particularly for those who would have otherwise moved into a higher contribution tier without the CPI-linked adjustment.

  • Employees with earnings on the edge of a threshold should monitor their payslips for any small fluctuations.

  • Backdated contributions or refunds may apply if bands are revised later in 2025.

How will pay awards affect contribution tiers later in 2025?

The NHS contribution system is dynamic and responds to national pay awards, such as those negotiated under the Agenda for Change framework.

What to Expect:

• If the 2025 pay award exceeds 1.7%, contribution thresholds may be adjusted again to reflect the higher increase.

• Any further adjustments would be backdated to 1 April 2025.

• The NHS Business Services Authority (NHSBSA) will:

  • Recalculate contributions for the earlier months of the financial year.

  • Automatically issue arrears or refunds depending on whether employees move up or down a contribution tier.

📌 Why it matters:

• Prevents over-contributions that can reduce take-home pay.

• Ensures employees contribute proportionally to their updated earnings.

• Encourages fairness and consistency across the workforce.

NHS Pension employer contributions: What should you know?

As of April 2025:

• 20.6% of pensionable earnings is still the employer contribution percentage.

• This cost is centrally funded by the Department of Health and Social Care (DHSC), not directly by trusts

• Employee contribution rates vary from 5.2% to 12.5%, depending on tier

Key facts:

• Employer contributions are not visible on payslips

• They play a major role in building pension value, especially in the defined benefit structure

• For every £1 you contribute, the employer contributes almost £4 in some cases

Because of this, the NHS Pension Scheme is among the most generous in the public sector in the United Kingdom.

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How does the Scheme treat part‑time staff and additional hours from April 2025?

By guaranteeing that any extra hours worked by part-time employees up to their full-time equivalent (WTE) qualify as pensionable service, the NHS Pension Scheme formally fixed a long-standing problem in the 2015 scheme regulations starting in April 2025.

Key Improvements:

• Additional hours up to WTE are now automatically pensionable.

• This change ensures equal pension opportunities for part-time workers compared to their full-time colleagues.

• It addresses a regulatory loophole that unintentionally excluded some part-time hours from pension calculations in earlier years.

What if my employer didn’t previously pension my additional hours?

To correct past errors, the NHS has introduced a mandatory employer-led remediation process.

Employer Obligations:

1. Identification: Employers must review payroll and rostering data to identify employees whose additional hours were not pensioned.

2. Notification Deadline: Affected employees must be notified by 1 January 2026.

3. 3-Month Election Window: Once notified, staff have three months to opt in and pension their previously uncredited hours.

4. Payment Flexibility: Employers are required to offer:

   • Repayment plans for pension arrears (including instalment options).

   • Time extensions where needed, up to a final cut-off of 1 July 2026.

What happens if I worked extra hours between 2015–2024?

The pension scheme now allows members to pension additional hours worked between 1 April 2015 and 31 March 2024, which were previously excluded.

You Can Now:

• • Elect to include those hours in your pension record

  • Arrears should be paid to reflect the time’s pensionable worth.

  • Benefit from enhanced pensionable service and pay as if the hours had been correctly pensioned

What if I’ve left the NHS or am on long-term sick leave?

1. Legal ambiguity exists for those no longer employed or absent

2. Action: Contact NHSBSA early to discuss repayment options and check if you’re eligible post-employment.

How are member contributions calculated during reduced pay or unpaid leave?

Since 1 October 2022, member contributions are based on actual pensionable pay, rather than the previously used assumed whole-time equivalent (WTE) pay.

What Changed:

• During periods of reduced pay (e.g., maternity leave, phased return, or partial sickness), contributions are now calculated only on the amount actually received, not your full WTE salary.

• This ensures contributions align with affordability and actual earnings.

📉 Example: If you work 50% hours, you now contribute based on 50% pay—not as if you were full-time.

What does that mean during reduced or no pay?

The scheme provides nuanced treatment of low- or no-pay periods to support continued pension growth even when earnings drop.

During Reduced Pay:

• Contributions are calculated on the reduced salary.

• Pension benefits, however, are still based on deemed full pay, preserving the value of your final pension.

During Zero-Pay Periods:

• You continue to accrue pension benefits as if earning your last known full pensionable salary.

• Contributions are assessed using your most recent full-pay earnings.

This policy ensures that members don’t lose out on pension growth during parental leave, career breaks, or sick leave, as long as the break is recognized by the scheme.

Could I get a refund if contributions were overpaid?

Absolutely—this clarification is retrospective to 1 October 2022. If your employer used deemed pay rather than actual, they must refund overpayments.

Action Steps:

1. 1. Review Past Payslips: Look for periods of reduced hours or unpaid leave from October 2022 onward.

   2. Cross-check with Payroll: Identify whether pension deductions were calculated on actual or deemed salary.

   3. Contact HR or NHS Pensions: Submit a request to review overpayments and initiate the refund process if applicable.

ALSO READ: What Medical Conditions Qualify for Attendance Allowance in the UK

What McCloud‑related changes and GP profit certificate updates apply from April 2025?

From April 2025, several key reforms affecting GPs and McCloud remedy members came into force. These updates focus on improving accuracy, flexibility, and fairness in pension entitlements for both medical practitioners and NHS staff impacted by the 2015 pension scheme changes.

Can GPs update their pensionable profits?

Yes. From the 2024/25 tax year onward, General Practitioners (GPs) and non-GP providers can align their pensionable profit figures with updated HMRC submissions, even if those figures differ from earlier self-assessments.

Why This Matters:

• Many GPs file provisional pension estimates before finalising their tax returns.

• If revised tax returns result in updated profit figures, these can now be re-declared to NHS Pensions.

• This ensures more accurate pensionable earnings records, especially important for those nearing retirement or Annual Allowance thresholds.

✅ Key Benefit: Pension inputs and growth calculations now better reflect true taxable income, reducing risk of over- or under-funding.

What about McCloud remedy deferred choice elections?

The McCloud remedy—intended to reverse age discrimination in the 2015 NHS Pension Scheme reforms—has entered its implementation phase, including important updates to Deferred Choice Underpin (DCU) elections.

What Has Changed:

• Members who previously made a Deferred Choice Election (choosing whether their service between 2015–2022 would count under the legacy or reformed scheme) now have the right to revoke or let that choice lapse.

• The updated regulations recognize that previous decisions may have been made without access to complete information, such as pension statements or forecasts.

📌 Practical Implications:

• • Some may now find the alternative scheme more favorable due to career changes, earlier retirement, or updated pension growth forecasts.

  • The ability to revisit your election provides additional planning flexibility—especially crucial as members approach retirement or consider lump sum decisions.

What if I haven’t received my McCloud statement yet?

While the McCloud remedy timeline projected that service statements would be issued by April 2025, delays continue to affect thousands of NHS pension members.

Consequences of the Delay:

• • Members cannot make informed choices about their pension scheme benefits without seeing the impact of the McCloud remedy on their service and entitlements.

  • Those approaching retirement risk entering benefit crystallisation (taking their pension) without the option to revoke an earlier election—a potentially irreversible situation.

  • Delays reduce time available for financial planning, tax advice, and pension modelling.

What other technical and regulatory amendments came into force in April 2025?

Several smaller but important updates include:

• Neonatal care leave (introduced 6 April 2025): matches pension treatment of other leave types like maternity.

• Qualifying service corrections: 1995-to-2008 service bridging fixed retrospectively from 2015.

• Parental bereavement leave: updated references in 2008 regulations.

• Factoring additional pension costs: all schemes now apply new cost factors immediately for new purchases.

• Fixes for benefit accrual mistakes affecting a small group (e.g., 135 members) from 1 April 2015 to 2022.

• Clarified forfeiture of lump sums—benefits correct the reference to qualifying offences.

• Updates to the lifetime allowance elimination will take effect in the fiscal year 2024–2025.

What should NHS staff and employers do now to comply with April 2025 pension changes?

The 2025 NHS Pension Scheme updates introduced major administrative and regulatory reforms. To ensure smooth implementation and full compliance, both employers and staff must take timely and proactive action.

Employer responsibilities for part‑time additional hours

From April 2025, all additional hours worked by part-time staff up to their full-time equivalent (WTE) must be treated as pensionable. Employers are legally required to retrospectively address any missed pensionable hours dating back to April 2015.

✅ Required Actions:

• Identify affected employees: Review rostering and payroll data to find part-time staff whose additional hours were not pensioned.

• Notify staff by 1 January 2026: Provide formal communication to eligible employees outlining their right to elect pensioning of past additional hours.

• Allow an election window: Offer at least 3 months for members to opt in, with flexibility up to 1 July 2026 for complex cases.

• Offer repayment flexibility:

  • Enable arrears to be paid in instalments.

  • Allow for voluntary opt-outs for those who choose not to proceed.

  • Ensure transparency in how pensionable earnings and service will be adjusted.

Employer steps for reduced or zero‑pay periods

Following reforms backdated to October 2022, employers must now calculate contributions based on actual pay, not deemed WTE, during periods of reduced or no income (e.g. sick leave, maternity leave, or career breaks).

✅ Action Plan:

• Conduct an internal audit: Review all payroll records from 1 October 2022 onward to spot errors in contribution calculations.

• Identify overpayments: Where contributions were based on deemed pay instead of actual earnings, determine the overpaid amounts.

• Issue refunds: Coordinate with payroll and finance teams to reimburse affected staff promptly and correctly.

• Adjust systems going forward:

  • Update payroll software or settings to calculate contributions using real-time earnings.

  • Train HR and finance personnel on correct application of revised rules.

Employer steps for GP providers

GP practices and non-GP providers must support the accuracy of pensionable profit declarations in light of new flexibility introduced from the 2024/25 tax year.

✅ Key Requirements:

• Accept revised pensionable profit figures: If GPs submit updated tax returns after initial self-assessment, practices must allow amended pension certificates to be submitted.

• Notify NHSBSA promptly: Any changes to previously submitted profit figures should be shared with NHS Pensions to ensure accurate Annual Allowance calculations.

• Coordinate with accountants: Ensure accurate alignment between tax filings and pension records, especially where profits affect pension input amounts or tiered contributions.

Employee actions to take immediately

NHS employees must also take responsibility for reviewing their pension records and understanding how the April 2025 changes affect their entitlement and take-home pay.

📝 Action Checklist:

1. 1. Review payslips and Total Reward Statements:

      • Ensure contributions match your actual pensionable earnings.

      • Cross-reference with HR records if you’ve changed roles, hours, or taken leave.

   2. If part-time, verify pensioned hours:

      • Check if additional hours were previously excluded.

      • If so, request an election form to have those hours pensioned and consider repayment options.

   3. Request your McCloud service statement:

      • If you haven’t received it, contact NHSBSA to find out when your statement will be issued.

      • Making educated Deferred Choice Underpin (DCU) decisions before to retirement requires this.

   4. Inquire about overpaid contributions:

      • Especially if you’ve had reduced or no pay since October 2022.

      • Ask HR or payroll to audit your record and issue a refund if you overpaid based on deemed pay.

   5. Seek financial advice if needed:

      • Consider consulting a specialist in NHS pensions or a qualified independent financial adviser to help you plan your retirement or make election decisions under McCloud.

Stakeholder	Immediate Actions
Employers	Identify part-time errors, offer elections, refund overpayments, update payroll systems
GP Providers	Accept amended profit declarations, align with HMRC, notify NHSBSA
Employees	Check payslips, request McCloud statements, elect for missed hours, seek refunds

What are the new changes to the NHS pension?

Key NHS pension changes in April 2025 include:

• Revised contribution thresholds: Reflecting a 1.7% CPI increase (with possible later revision)

• Part-time additional hours now pensionable: Retrospective back to April 2015

• Corrected contributions for reduced pay: Now based on actual—not deemed—pay

• GP profit certificate updates: Allowed for 2024/25, aligning with HMRC filings

• Expanded leave coverage: Including neonatal and bereavement leave

• McCloud updates: Deferred choice elections can now lapse or be revoked

How will these April 2025 changes affect my take‑home pay and retirement benefits?

• Slight increase in contributions if bands shift upward

• Part-time staff who retrospectively pension hours can include arrears in pay

• Refunds possible for prior overpayments during leave

Retirement benefit impact:

• Greater pensionable service for extra hours worked

• Continued accrual during neonatal or zero-pay periods

• Clear profit figures for GPs; improved pension accuracy

Are there any potential pitfalls or future concerns for NHS staff?

• Retrospective repayments: Part‑time staff should negotiate flexible repayment terms—especially those who have left or are off sick.

• McCloud delays: Continued statement delays may reduce time for decisions—individuals should escalate via union support if needed

• Payroll updates: ESR/POL systems need updating. Employers should brief staff on potential downtime (e.g., POL downtime in May 2025).

What is 10 years NHS pension worth?

The value of 10 years in the NHS Pension Scheme varies by:

• Earnings

• Pension scheme (1995, 2008, or 2015)

• Full-time or part-time service

• Retirement age

Here’s a rough estimate (2015 Scheme, average salary £35,000):

Note: Actual calculations depend on exact salary history and final pensionable earnings. NHSBSA can provide personalized estimates.

Conclusion

The NHS Pension Scheme April 2025 Changes bring critical improvements: clearer rules for part-time staff, fairer contribution calculations, and updates for GPs, leave types, and service corrections. They enhance retirement security, but require action—from both staff and employers—to ensure accuracy and fairness.

✅ Next steps:

Check your payslips, pension statements, and extra hours history

Part-time staff—ask HR if your extra hours were pensioned

Employees with reduced pay—review past deductions and request refunds

GP providers—ensure profit statements reflect HMRC returns

Contact NHSBSA or your union for support

By acting now, NHS staff can make the most of these changes and safeguard retirement planning.

FAQs

When did the new contribution thresholds take effect?

They applied from 1 April 2025, with thresholds increased in line with CPI and future pay awards.

Will part-time staff get pension credit for extra hours?

Yes, retroactively from April 1, 2015, for hours up to WTE. Election open until minimum Jan 2026, max July 2026.

Can I get a refund for overpaid contributions during leave?

Yes. If pay was reduced, contributions since Oct 2022 should use actual pay—not deemed. Overpaid amounts must be refunded.

What do I do if I haven’t received my McCloud statement?

Contact NHSBSA ASAP, escalate via BMA/Unison, and request confirmation of expected delivery date.

How do GP profit updates affect my pension?

You can now align your 2024/25 pensionable profits with HMRC returns—correcting previous inaccuracies.

Does neonatal care leave affect my pension?

Yes. Contributions accrue during neonatal leave similarly to maternity or paternity leave.

My employer used WTE for contributions—what should they do now?

They must recalculate contributions since Oct 2022, refund overpayments, and update payroll systems.

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