NHS Pension Scheme
David Mohamad · 24 March 2026
All NHS staff on Agenda for Change contracts are automatically enrolled in the NHS Pension Scheme. The scheme is a defined-benefit pension — your retirement income is based on your career average earnings, not investment returns.
Contributions are deducted from your salary each month. The rate you pay depends on your pensionable pay, which for most AfC staff is your annual full-time equivalent salary.
Contribution Tiers (2025/26)
The NHS Pension Scheme uses six tiers. Your tier is based on your whole pensionable pay, not just the portion in a particular band. Moving to a higher pay point can push you into a higher tier, increasing the percentage deducted from every pound you earn.
| Tier | Pensionable Pay | Rate |
|---|---|---|
| 1 | Up to £13,259 | 5.2% |
| 2 | £13,260 – £27,797 | 6.5% |
| 3 | £27,798 – £33,868 | 8.3% |
| 4 | £33,869 – £50,845 | 9.8% |
| 5 | £50,846 – £65,190 | 10.7% |
| 6 | £65,191 and above | 12.5% |
Source: NHSBSA member contributions
NET Pay Arrangement
The NHS Pension Scheme uses a NET pay arrangement. Contributions are deducted from your gross pay before income tax is calculated, so you receive full tax relief automatically through your payslip.
National Insurance is still calculated on your full gross pay before pension. This is a key difference from salary sacrifice, where both tax and NI are reduced. For most NHS staff on standard AfC contracts, salary sacrifice is not available.
How This Affects Take-Home Pay
Two people on the same gross salary can have different pension deductions if they fall into different tiers. A Band 5 nurse at the top pay point crosses into a higher tier than one at the bottom, paying a larger percentage on their entire salary.
Part-time staff pay the tier rate based on their full-time equivalent salary, but the actual deduction is calculated on their pro-rata pay. Use the calculator to see exactly how your pension tier affects your monthly take-home.
Related
- UK Pension Types Explained — NET pay, relief at source, and salary sacrifice compared
- NHS Agenda for Change Pay Bands — pay band reference with take-home breakdowns
- NHS Take-Home Pay Calculator — personalised breakdown with student loans, salary sacrifice, and Scotland