Transferring money into the NHS pension scheme

This guidance sets out why you may want to transfer your pension benefits into the NHS pension scheme and what actions you need to take to do this.
Location: UK
Audience: All doctors
Updated: Friday 3 November 2023
Piggybank illustration

Transferring benefits in and out of the NHS pension scheme

  • You are able to transfer your benefits into of the NHS pension scheme.
  • There are restrictions on the type of transfers available and time limits which apply.
  • Benefits can be transferred into the scheme if the application to do so is made within 12 months of joining the scheme or first being eligible to join the scheme. If the other pension is held concurrently with the NHS pension this time limit can be extended to start running from when the other employment terminates and the pension is able to be transferred in.
  • Applications have to be made before the normal pension age of the section of the NHS pension scheme to which you belong.  Since 1 April 2022 all active membership is in the 2015 scheme where the normal pension age is linked to your State Pension age (or age 65 if later).

Moving to a different UK nation

There are three separate NHS pension schemes; one for England and Wales, one for Scotland and one for Northern Ireland.

In order to ensure that your pension from your current NHS employment fully reflects all your NHS pensionable service you should consider transferring your service into your current NHS pension scheme. This will enable 1995/2008 section benefits which are transferred into the same schemes in the receiving nation to retain final salary linkage, and 2015 scheme benefits to continue to be revalued in line with in service factors providing you do not have a disqualifying break in service of five years or more.

You will need to be an active member of the receiving scheme in order to apply to transfer your pension to your new pension scheme within 12 months of moving.  Scotland will consider transfers outside of 12 months so long as it is before your Normal Pension Age.

Apply to transfer:

If you are transferring from the 1995 section of the scheme in one nation to the 1995 section of the scheme in another nation you will be credited with day for day service. The same is true if you are transferring from the 2008 section of the scheme in one nation to the 2008 section of the scheme in another.  This will only be possible if the transfer happens within 5 years of leaving the NHS.

If you are transferring from the 1995 section to the 2008 section the transfer will be calculated on a cash equivalent basis.  The same is true if you are transferring from the 1995/2008 section to the 2015 CARE scheme after a break of 5 years or more.

Transfers of 2015 CARE scheme benefits between corresponding NHS pension schemes will provide like for like service and a cash equivalent transfer value based on the income accrued in the transferring NHS scheme. The pension earned in your previous scheme will be transferred to the receiving scheme and will be uprated and treated as though it had been earned in the current NHS scheme.

If you are buying added years and wish to continue with the contract when you move to another nation you must inform your employer and the new pension administrators of this arrangement immediately.

 

Transferring your NHS pension abroad

 

Time limits

Transfers into the NHS pension scheme:

Transfers in must be undertaken within 12 months of being eligible to join the 2015 CARE scheme.

 

How to apply for a transfer out

  • Ask your new registered scheme to write to your previous pensions agency to initiate a transfer (advising them of the time limits), or write directly to them yourself .
  • If the transfer is possible, a CETV (cash equivalent transfer value) will be provided.
  • The new scheme administrators will be able to advise on the level of benefits this will acquire in the new scheme.
  • You are not committed to proceeding with the transfer as a result of having asked for a transfer value. This is your opportunity to decide whether a transfer is in your interests.  

 

Public Sector Transfer Club

Certain public sector schemes are members of what is known as the Public Sector Transfer Club (participating schemes are known as ‘club schemes’). There are strict time limits for ‘club’ transfers which must be applied for within 12 months of joining the new club scheme and the break between the transferring scheme and the new scheme must not exceed five years.

A special calculation is used in the club transfer process which is often more favourable than that used for non-club schemes. Transfers between club schemes generally provide broadly equivalent benefits in the new scheme, regardless of any increase in salary on moving.

However, the calculation allows for any differences in the structure of the schemes, eg, a different normal pension age, so the amount of pensionable service offered in the new scheme may differ from the pensionable service in the old scheme.

If you have missed the time limit

  • You cannot transfer your accrued benefits into the new scheme. The scheme may consider accepting the transfer on a non club basis where the guarantee of equivalence does not apply.
  • You cannot opt-out for 12 months and on rejoining request the transfer is made – this would also not be in your financial interests (as it will affect not only pension accrual but also any life assurance and ill health retirement benefits which may become payable during the time you have opted out). 

 

Transferring in from a non-club scheme

There is no guarantee of the level of benefit which will be credited to you in the NHS pension scheme on account of your membership of another pension scheme which is not a comparable NHS scheme or a member of the Club.

The cash equivalent value of the benefits in your former scheme will be used to calculate an amount of pension in the 2015 scheme based on actuarial factors and assumptions. In the 2015 scheme you will receive an annual pension and a contingent amount for a dependant. These pension amounts are revalued annually in line with in service factors, during active membership, and in line with increases under the Pensions (Increase) Act if your benefits are deferred or in payment. The normal pension age for these benefits is your state pension age.

If you are transferring from a personal pension or defined contribution pension scheme the amounts credited in the NHS pension are guaranteed and will increase annually in line with the relevant factors.
You are not committed to the transfer until you sign the discharge forms normally required only after the pensions agency has given you a quotation to confirm how much pension you will receiving in the 2015 scheme on account of the transfer.

Annual allowance

HMRC has set a limit on how much Defined Benefits can grow by and how much can be contributed to Defined Contribution schemes before tax relief is clawed back.  This limit is known as the Annual Allowance and is currently £60,000 but can reduce for higher earners.  

Transfers into the NHS pension scheme can impact on the calculation where you have had a significant pay increase.

 

Refund of contributions

This is only possible if you have less than two calendar years of scheme membership.

If however you have transferred benefits from a personal pension plan or other defined contribution arrangement into the NHS pension scheme and you then leave the scheme with less than two calendar years of members you are unable to claim a refund of your contributions. You will have met the scheme preservation requirements and qualify for a deferred pension.

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