Costs and Contributions
What Do You Actually Pay?:
From 1st October 2022 there are 11 tiers of contribution rates. The current rates are listed below:
| Tier | Actual Pensionable Pay | Employee Rate |
|---|---|---|
| 1 | Up to £13,321.00 | 5.1% |
| 2 | £13,232.00 to £15,431.00 | 5.7% |
| 3 | £15,432.00 to £21,478.00 | 6.1% |
| 4 | £21,479.00 to £22,548.00 | 6.8% |
| 5 | £22,549.00 to £26,823.00 | 7.7% |
| 6 | £26,824.00 to £27,779.00 | 8.8% |
| 7 | £27,780.00 to £42,120.00 | 9.8% |
| 8 | £42,121.00 to £47,845.00 | 10.0% |
| 9 | £47,846.00 to £54,763.00 | 11.6% |
| 10 | £54,764.00 to £70,630.00 | 12.5% |
| 11 | £70,631.00 and above | 13.5% |
The contributions are based on your Actual Pensionable pay. This will depend on; the type of contract you are on, whether toy are full, or part-time, other work you do beyond your basic contract.
If you are unsure if the amount you pay is correct, please contact us and we will explain this and calculate this for you.
Tax arrangements
NHS Pension Scheme members will receive tax relief on their pension contributions up to a certain amount. This is because contributions are taken from pay before tax is taken off, therefore contributions reduce the amount of pay subject to Income Tax.
The tax relief available for pension savings is subject to certain limits known as the Annual Allowance, these restrictions put in place by HMRC.
What if You Change Your Job?
If you change employers, receive a promotion etc. on or after the 1st April; your contribution rate will be reassessed based on a combination of your old and new pensionable pay.
Technically a change in pay (other than due to an unexpected change in duties or one unlikely to persist for at least 12 months) would cause an in year re-assessment of your contribution tier. So if your original rate has been assessed using your pensionable pay (notional whole time for part time employees) for previous year ending 31st March and your pay then increases on or after the 1st April, the reassessment should be done.
The pensionable pay that your rate is based upon will include all pensionable allowances. If you work more than one part-time role your pensionable you pensionable pay will be calculated on the total.
The contribution rate is applied to all of your pay. For example, if you are an employee earning £50,000 your will pay the relevant percentage on the full £50,000.
If you would like more information on this subject we recommend you contact us.