Substantial changes to the NHS pension contribution rates and tiers were implemented from 1st October 2022, which may leave you wondering how this impacts you. Luckily, our NHS pensions expert, Tom Slevin, is on hand to explain what these changes mean…
How will my NHS pension contributions be affected?
The changes to NHS pension contribution rates will affect dentists differently, depending on how much NHS work you do.
If you’re a dentist predominantly working for the NHS, you may see no change or even a reduction in your NHS pension contributions if you have particularly high NHS pensionable earnings.
However, if you’re a dentist who’s only doing a small amount of NHS work, you’re likely to see a rise in your monthly NHS pension contributions.
The changes implemented have not changed the pension accrual rate (currently 1/54th of your pensionable earnings each year), so this is why higher earning NHS dentists may now pay less for the same benefit, while dentists doing only a small amount of NHS work will pay more for the same benefit they were previously getting.
What are the new contribution rates and tiers?
From 1st October 2022, the new contribution tiers and rates are:
The highest contribution rate is now 13.5% (previously 14.5%), while foundation dentists will see an increase in their pension rate from 9.3% to 9.8%.
How much difference will the new rates make to my contributions each year?
The difference in annual pension contributions for each level of NHS pensionable earnings are:
What happens next?
A second phase of changes is expected in the 2023-24 tax year, however this hasn’t been finalised yet. The original proposals were that the lowest pension contribution rate would be 5.2%, with the highest contribution rate being 12.5%, but with the Autumn Statement looming on 17th November this could change yet again.
Updates to COMPASS
COMPASS was updated in mid-October and the updated pension rates are being used from the 2223/07 NHS schedule.
We’re here to help
If you are a dental practice or associate dentist who wants more information on how these changes affect you, get in touch and one of our specialist dental accountants with talk you through it.
