The NHS Pension Scheme is one of the most generous public sector pension schemes in the UK—but it’s also one of the most complex. For doctors, especially those juggling NHS and private work, understanding how it works is vital for effective financial planning.

With ongoing reforms, the 2015 scheme, the McCloud Remedy, and lifetime and annual allowance changes in recent budgets, now is the time to get clear on your NHS pension position.

In this in-depth guide, we explain what every doctor needs to know about the NHS Pension Scheme in 2025: how it works, recent changes, planning considerations, and how Rise Wealth can help you make sense of it all.

What Is the NHS Pension Scheme?

The NHS Pension Scheme is a defined benefit pension scheme, meaning it provides a guaranteed income for life in retirement based on your earnings and length of service.

There are three main NHS pension schemes that a doctor might be part of:

  • 1995 Section (final salary scheme)

  • 2008 Section (final salary scheme)

  • 2015 Scheme (career average revalued earnings, or CARE)

From 1 April 2022, all active NHS pension members were moved into the 2015 Scheme as part of the transition following the McCloud judgment.

Quick Overview of Each Scheme

To make the differences clear, here’s a comparison of the 1995, 2008, and 2015 NHS pension schemes.

Scheme Basis Normal Pension Age Lump Sum Formula / Accrual Notes
1995 Section Final salary (best year of last 3) 60 Automatic 3x pension (Final Salary × Service) ÷ 80 Closed to new accrual
2008 Section Final salary (best 3 consecutive years of last 10) 65 Optional lump sum (commutation) (Final Salary × Service) ÷ 60 Closed to new accrual
2015 Scheme Career average (CARE) Linked to State Pension Age (66–68+) None automatic 1/54 of earnings revalued with CPI + 1.5% Active scheme for all members
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What Is the McCloud Remedy?

The McCloud Remedy corrects age discrimination that occurred when the 2015 scheme was introduced. At the time, older members were allowed to remain in the 1995 or 2008 schemes while younger members were moved into the 2015 Scheme.

As of 2025, affected doctors will receive a choice of which pension benefits to take for the period 1 April 2015 to 31 March 2022—either from their legacy scheme (1995/2008) or the reformed 2015 Scheme. This is called the Deferred Choice Underpin (DCU).

What Doctors Need to Do

  • No action is required yet—NHS Pensions will write to affected members in due course.

  • At retirement, you’ll be asked to choose which benefits to take for the remedy period.

  • It’s crucial to take advice, as this could significantly impact retirement income, lump sums, and tax exposure.

Key Benefits of the NHS Pension Scheme for Doctors

  • Inflation-protected income for life

  • Spouse and dependent pensions

  • Ill-health retirement benefits

  • Death-in-service cover

  • Tax-free lump sum (automatic or optional)

Annual Allowance and Lifetime Allowance Changes (2025 Update)

Here’s a summary of how the latest changes affect NHS doctors in 2025.

Rule 2025/26 Position Key Details
Lifetime Allowance (LTA) Abolished (from Apr 2024) No cap on pension size, but lump sums capped at £268,275 unless protected
Annual Allowance (AA) £60,000 standard Tapered down to £10,000 for high earners; applies to pension input amount
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Planning Tips for Doctors in the NHS Pension Scheme

1. Understand Your Scheme Membership

Request a pension statement to see:

  • Which sections you’ve been in

  • Pensionable service

  • Accrued benefits to date

  • Estimated benefits at retirement

2. Watch Out for the Annual Allowance Trap

High-earning consultants and GPs often exceed the AA due to:

  • Promotions

  • Additional sessions

  • CPI uplifts on previous pension pots

Mitigation strategies include:

  • Opting out of the scheme temporarily

  • Using Scheme Pays to cover AA charges

  • Making alternative private pension contributions

3. Factor in the McCloud Remedy

Your choice at retirement could impact:

  • How much lump sum you receive

  • When you can retire

  • Whether you incur a tax charge

4. Consider Early or Phased Retirement

The 2015 Scheme offers more flexible retirement options:

  • Partial retirement while still working

  • Taking some benefits early

  • Mixing NHS and private income streams

5. Include Your NHS Pension in Your Estate and Protection Plan

  • Death in service benefits can be significant—ensure nominations are up to date.

  • Spouse and dependents’ benefits are valuable but often misunderstood.

  • Combine your NHS pension strategy with personal protection and estate planning.

What If You’re a GP or Have Private Practice Income?

NHS pensions for GPs are calculated differently, based on total pensionable earnings submitted via Type 1 forms annually. It’s crucial that records are accurate.

For those with private earnings:

  • These are not included in NHS pension calculations

  • Consider private pensions (e.g. SIPP or SSAS) to supplement retirement income

  • Ensure you’re not breaching AA across both NHS and private pensions

Frequently Asked Questions

Can I take my NHS pension and keep working?
Yes. Under the 2015 Scheme’s retire and rejoin rules, you can take your pension and return to NHS work (subject to conditions). No abatement applies post-2023.

Should I opt out of the NHS pension?
In most cases, no—the scheme is highly valuable. However, some high earners may benefit from partial opt-out strategies. Always seek independent advice first.

Is my NHS pension affected by inflation?
Yes. NHS pensions are index-linked, meaning they rise with CPI inflation both before and after retirement, helping maintain real value.

How Rise Wealth Helps Doctors Navigate Their NHS Pension

At Rise Wealth, we specialise in financial planning for doctors, including those working in the NHS, private practice, or both.

We help clients:

  • Interpret NHS pension statements

  • Model income at retirement (across multiple schemes)

  • Avoid unexpected tax charges

  • Plan around the McCloud remedy and new pension rules

  • Coordinate NHS and private pensions into one holistic plan

Ready to Take Control of Your NHS Pension?

Don’t leave your pension planning to chance. The decisions you make today will shape your retirement for decades.

  • Book a free NHS pension consultation with a Rise Wealth adviser

  • Get clarity, not confusion

  • Based in Harrogate – helping doctors UK-wide

Let us help you protect your future—and retire on your terms.