Deemed pay in the NHS pension scheme

If you're salaried in the NHS, you might have heard about some changes to the pension scheme and the tier rate applied to your contributions when you're on leave. We’ve broken down the changes below.

What were the old rules?

If your pay was reduced (for maternity or sick leave), you would have continued to pay contributions based on a tier rate calculated using your deemed pay.

Deemed pay is the salary you would have been paid if you hadn’t been absent from work.

What’s changed?

Since 1 October 2022, the NHS Pension Scheme has calculated contribution rates based on your actual pay, not deemed pay. This means that if your pay is reduced due to being absent from work, your pension contributions are now based on what you're actually earning.

What does this mean for you?

The new rules make sure your pension contributions match your real earnings during times when your pay is reduced. This may result in a refund of overpaid contributions.

Action you can take now

If you received reduced pay between 1 October 2022 and 31 March 2024, you’ll need to check with your employer that your tier rate was based on the correct level of pay.

If you're a salaried GP, you should review your Type 2 pension certificates for 2022/23 and 2023/24, and resubmit a revised certificate if necessary. Any overpaid contributions will be refunded to you.

Need help?

If you think this may apply to you or you need support completing your Type 2 certificates, we're here to help.

Get in touch with your usual Larking Gowen contact or email enquiry@larking-gowen.co.uk

Louise Prime