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Original poster

NHS payrise and pension

70 replies

PolarTundra · 24/09/2021 08:45

Hi there, first payday today since the NHS 'payrise' which has been backdated to April, very happy to have a few hundred extra in my pay this month.
However - my pension contributions have gone up over 3% this month bumping from 9.3 to 12.5%.
I've just put my new pay into a salary calculator (I'm top of band 8a) and next month I will be taking home over £100 less than before the payrise kicked in, because it will be swallowed up by pension. This is before the NI rise kicks in!
Is this right? Does anyone know if the pension bands will increase at any time now that pay has gone up?
I know I'm lucky to be earning a good salary and I'm sure I'll be happy with my pension when I'm 80 but right now, with mammoth childcare fees and cost of living going up this is really going to be a squeeze 😔

OP posts:
Original poster
PolarTundra · 24/09/2021 08:46

By pension bands increasing I mean the 12.5% cut off should really rise to a higher salary, maybe in line with 8b

OP posts:
fromdownwest · 24/09/2021 10:27

You won't be 80 when you get your index linked pension for life.
You have two options
Take the monthly hit and reap the rewards of a very very generous pensions scheme, or opt out, don't pay and then regret it in retirement.

Mrscaptainraymondholt · 24/09/2021 11:50

do you have any salary sacrifice? like childcare vouchers/cycle to work/lease car? I think they may lower your income to bring the pension contribution down?

I've got my back dated pay rise too and am so annoyed that I lose over half of it to tax, NI, backdated pension and a sudden increased student loan payment - am sure it wouldn't have been so much if they had just put it through back in April.....

Original poster
PolarTundra · 24/09/2021 12:00

I know @Mrscaptainraymondholt it's really not much after all those deductions is it! I do have a lease car until next year, won't be rushing to do it again but will have to see how that affects the pension contributions.
@fromdownwest how can you be so sure we won't be 80? The state pension age is bound to go up again in the 30 odd years before I'll be getting it. I'm not going to leave the scheme but was wondering if the pension contribution bands would be increasing in line with the pay rises. 9.3% was fine and I'd be happy to carry on paying that much but the extra 3% seems a lot!

OP posts:
AstonishingMouse · 24/09/2021 12:27

I wouldn't expect the pension contribution bands to increase in line with pay rises, I think they have been the same since 2015. I imagine this is intentional to move more of the workforce into higher contribution rates.

Agree that it is a rather painful jump. I'm in London where there is a high cost area supplement to offset the higher cost of living, but this means that Band 7s are also subject to the 12.5% rate. And for part time workers it is dependant on whole time equivalent salary rather than actual pay, which has previously meant that I paid more pension contributions than tax.

I am not complaining here, just commenting that it is a large jump and a more gradual increase would be good. This would prevent a pay rise resulting in the rather depressing phenomenon of a decrease in take home pay, particular for those taking on extra responsibilities.

pianolessons1 · 24/09/2021 12:30

Yes it's a problem if you're just over a tier boundary . Some years I have taken a few days unpaid leave to bring me back under the boundary.

Kenneldogsrock · 24/09/2021 12:32

Yes unfortunately it is an unintended impact if you are at the top of the band. It happened to me and a couple of colleagues a couple of years ago and none of us knew it was going to happen and took us all by surprise!

Original poster
PolarTundra · 24/09/2021 12:53

@AstonishingMouse that's ridiculous that London weighting isn't taken into account!

OP posts:
MarieG10 · 24/09/2021 13:02

@PolarTundra

If you are band 8a I don't understand why your contributions have just risen to 12.3 % unless you are part time? The threshold is £47846

MasterOfOne · 24/09/2021 13:05

I am in exactly the same boat..... my take home pay is lower than last month due to increased pension contributions

Original poster
PolarTundra · 24/09/2021 13:10

@MarieG10 I don't fully understand why either but it might be the car on salary sacrifice as that brings my salary down about 3.5K per year 🤔
@MasterOfOne sending commiserations. I know people will think we're complaining about a payrise but when it results in less money in your bank every month its hard not to be a bit disappointed.

OP posts:
fromdownwest · 24/09/2021 16:49

It may be less money now, but it is deferred benefits. You will be thankful when you take your pension that you have had this uplift,
Even if Hard to see now.

Alpinechalet · 25/09/2021 01:05

Are you sure next month’s new salary will be above the threshold? It could be that it is only this month you pay the extra.

imbeingtakenoverbythefear · 25/09/2021 01:13

It could be that it's just this month it's less due to the arrears, which is shit but maybe just the way it is. I'm on the second jump of band 5 (qualified four years) and I took home a couple of hundred more than I expected this month with the arrears but my pension has remained at 9.3%.

CosmicUnicorn · 25/09/2021 15:34

It should be just this month. I hope!

rwalker · 25/09/2021 15:39

Your on about 54K you very close to next pension band and backdated pay has pushed u into next bracket .
Think it should drop back down on flat month .

gmailconfusion2 · 28/09/2021 20:42

I had this as a band 6, first two years I actually took home less than when I was band 5 due to pension, I just had to suck it up and keep telling myself it'll be worth it in 45 years

Original poster
PolarTundra · 25/10/2021 05:35

Another fun pay update - this month they took the 12.5% plus another £400 in 'pension arrears ' leaving me about £400 worse off than I was before the payrise Confused
I have been back from maternity leave since March so not sure why I am suddenly having to pay back such a large chunk but I will be phoning the payroll team today to find out how much arrears I owe them and why I wasn't given any warning of this Sad that's 20% of my pay just taken on pension this month!!

OP posts:
MrsLargeEmbodied · 25/10/2021 05:50

we had a communication about this.

Original poster
PolarTundra · 25/10/2021 05:52

What did it say? We haven't had one

OP posts:
MrsLargeEmbodied · 25/10/2021 05:53

staff have been advised to contact payroll asap so that the pension contributions can be paid in installments

TangoWhiskyAlphaTango · 25/10/2021 05:54

OMGEEEEEE me too and I am absolutely gutted!!!! I am a single mum and this month am £600 down due to arrears just checked my pay slip. I simply cannot afford it - over 1k in pension contributions this month. I had zero communication about this, right on top of Xmas too. I don't know how I am going to get through the month.

TangoWhiskyAlphaTango · 25/10/2021 05:55

I am top band 7 and only work part time so salary is 35500 yet they have still moved me into the 12.5% bracket. I checked with pensions last month and apparently its correct. I know its a good pension, I really do but by god this is crippling me.

TangoWhiskyAlphaTango · 25/10/2021 05:58

Looking online this is arrears from April until September. So because we were moved into the next payband its those arrears they are taking this month. No warning just £575 down on top of the usual £425 a month contributions on a salary of 35500 its a bloody lot of money.

bookish83 · 25/10/2021 06:01

I didnt realise you paid contributions on full time wages? Is this a good thing long term for pro rata staff?

OP I would be in shock too with that. I can see why the deductions have been taken but to suddenly have that in one go! I would not have that money spare either