NHS staff opting out of pensions

CONCERNS have been raised over an “epidemic” of workers opting out of the NHS pension scheme.

Workers who opt out could be giving up pensions worth around nine times what they save, Royal London warned.

It said a recent Freedom of Information (FOI) request by the Health Service Journal found nearly a quarter of a million (245,561) NHS staff had opted out of the NHS pension scheme in the past three years.

A nurse earning £25,000 annually who opted out for a year could save £1,420 by doing so. But it would cost a lump sum of around £13,000 – roughly nine times the £1,420 saving – to fill the pension hole caused by that one year of lost pension in retirement, Royal London said.

When people opt out they also give up large employer contributions into their pension pot.

Sir Steve Webb, a former pensions minister who is now director of policy at Royal London, said: “The NHS as an employer needs to take urgent action to tackle this epidemic of pension opt-outs.

“All public sector workers have faced a squeeze on their takehome pay in recent years, but it is in the NHS where this has translated into shockingly high numbers of people leaving the pension scheme.”