NHS Pension Schemes: 1995, 2008 and 2015 Explained

Why there are three NHS pension schemes

The NHS pension has changed twice over the years, which is why there are three sections rather than one. The 1995 section was the original scheme for most staff. The 2008 section was introduced for newer joiners and for existing members who chose to move. Then in 2015 the whole scheme changed to a new design for everyone building future pension. Because these changes applied to future service rather than wiping out what people had already earned, many staff hold benefits in more than one section at once, for example a chunk of 1995 pension plus 2015 pension built more recently. Each section has its own rules on how the pension is worked out and when you can take it, so knowing which sections you are in matters.

The 1995 section

The 1995 section is a final salary scheme, which means your pension is based on your pensionable pay close to retirement rather than across your whole career. It builds a pension of 1/80 of your final pensionable pay for each year of membership, and it pays an automatic tax-free lump sum of three times that pension on top. Its normal pension age, the age you can take it in full without reduction, is 60. Some long serving members, such as certain nurses and other groups with what is called special class status, can take it earlier without the usual reduction. No new members can join the 1995 section now, but a great many staff still hold 1995 benefits from earlier service.

The 2008 section

The 2008 section is also a final salary scheme, but with a different design from 1995. It builds a higher annual pension of 1/60 of final pensionable pay for each year of membership, but unlike 1995 it does not pay an automatic lump sum, though you can create one by giving up some pension. Its normal pension age is 65. The 2008 section was offered to new joiners from 2008 and to existing 1995 members who chose to switch under a past choice exercise. Like the 1995 section, it is now closed to new build, but many members still hold 2008 benefits.

The 2015 scheme

The 2015 scheme is where everyone builds new pension today, and it works differently from the two older sections. Instead of final salary, it is a career average revalued earnings scheme, usually shortened to CARE. Each year you build a slice of pension worth 1/54 of that year's pensionable pay, and the slices you have already built are increased each year while you are working, by the Consumer Prices Index plus 1.5 percent, to protect their value. Its normal pension age is the same as your State Pension age, so it is higher than the older sections. Because it is based on each year's actual pay rather than a final salary, it can be fairer for people whose pay does not rise steeply towards the end of their career, and it treats part-time and lower-paid years on the same basis as any other.

Final salary versus career average, what really changes

The core difference between the old and new schemes is the pay your pension is based on. A final salary scheme like 1995 or 2008 links your whole pension to your pensionable pay near the end of your career, so a big promotion late on lifts the value of all your earlier service. A career average scheme like 2015 instead locks in a slice based on each year's pay as you go, then revalues it, so late promotions only boost the years after them. For high flyers who climb steeply at the end, final salary could be more generous, while for people with steadier pay, or who do their best earning earlier, career average is often comparable or better. Neither is simply better than the other, it depends on your own pay pattern.

What the McCloud remedy means

When the 2015 scheme was introduced, older members were protected and kept in their 1995 or 2008 section for longer, while younger members were moved to 2015 sooner. The courts found, in a case known as McCloud, that this difference in treatment was age discrimination. The remedy puts it right. For the period from 1 April 2015 to 31 March 2022, known as the remedy period, affected members were returned to their old 1995 or 2008 section for that service, and when they come to retire they get to choose whether that period is paid as old section benefits or 2015 benefits, taking whichever is better for them. From 1 April 2022 onward, everyone builds pension in the 2015 scheme regardless. If you were affected, the NHS Business Services Authority provides statements to help you compare the two options, and the choice is normally made at retirement.

[FLAG FOR BUILD: confirm the current McCloud administration position, including how and when the choice is presented at retirement, against the NHS Business Services Authority before publish.]

How to tell which sections you are in

The simplest way to find out which sections you hold benefits in is to check your annual Total Reward Statement or your pension record through the NHS Business Services Authority, which sets out your membership. As a rough guide, your start date and history point to the likely mix: long serving staff who joined well before 2015 often have 1995 or 2008 benefits plus 2015 benefits, while anyone who first joined from April 2022 onward will be wholly in the 2015 scheme. If you are unsure, the NHS Business Services Authority can confirm your exact position, which is worth doing before you make retirement decisions.

What this means for your pension decisions

Knowing your sections matters because they have different retirement ages and different lump sum rules, which shape when you can afford to retire and how much tax-free cash you can take. If you have older benefits with a normal pension age of 60 or 65 alongside 2015 benefits tied to State Pension age, you may be able to take different parts at different times. To see what you pay in and what you are building, use our NHS pension contribution calculator at /nhs/pension-contribution-calculator/ and our guide to NHS pension contributions at /blog/nhs-pension-contributions-uk/. For when and how to take each part, see our guide to taking your NHS pension at /blog/taking-your-nhs-pension-uk/, and for the lump sum trade-off see our guide to the NHS pension lump sum at /blog/nhs-pension-lump-sum-uk/. For the scheme overall, see our full guide to the NHS Pension Scheme at /blog/nhs-pension-scheme-uk/.