‘Generational injustice’: Young nurses ‘forced’ to opt out of gold-plated pensions

NHS staff members opted out of their gold-plated pensions more than 82,000 times last year, with campaigners warning that many were being “forced” to do so because of financial pressures. The NHS Pension Scheme is considered one of the most generous in the UK because it is a defined benefit plan and the annual income of staff in retirement is guaranteed. But new figures obtained by wealth manager Quilter via freedom of information request shows that staff opted out of the scheme a record 82,212 times last year, up from 75,061 the year before. Shorts Most opts outs came from nurses and officers – administrative staff – rather than doctors. The number of dentists opting out was much lower. And younger staff were far more likely to have ditched the scheme than older staff, with 44,256 opt-outs (54 per cent) coming from staff under the age of 35. This number was negligible for those 75 and over. Campaigners said that nurses and younger staff were likely opting out in many cases because they could not afford to be a part of the pension scheme. Though the NHS scheme is generous compared to most schemes in the private sector, staff have to put greater portions of their wage towards it. The required contribution ranges from 5.2 per cent to 12.5 per cent depending on a staff member’s earnings. Private sector workers only have to pay 5 per cent into their pensions for their employers to contribute. Professor Nicola Ranger, Royal College of Nursing general secretary and chief executive, said staff were being “forced to borrow from their own futures because their salaries simply have not kept up with the cost of living“. “These findings are shocking and show the extent to which nursing staff have been left behind when it comes to pay,” she said. “It’s especially dismaying to see how badly younger staff are affected. These people are the future of the NHS and the fact they are put in this position is a moral failure. “It also stores up problems for the future, creates pensioner poverty among the workforce that’s supposed to be delivering care and drives young people away from nursing altogether. “The growing number of opt-outs should be a wake up call to the government and employers about the financial strain facing the nursing workforce.” Nursing staff in England and Wales received a 3.3 per cent consolidated pay award from April, while doctors got a 3.5 per cent pay increase. But the RCN and the British Medical Association (BMA) which represents doctors had disputes with the government over the pay award. Graham Crossley, NHS pensions specialist at Quilter, said it was “no surprise” that so many of those opting out of the NHS Pension Scheme were younger workers. He said: “People in their twenties and thirties are facing enormous financial pressures, whether that’s trying to save for a first home, coping with higher mortgage costs, paying rising rents, managing childcare expenses or simply keeping up with the cost of everyday living. “When money is tight, pension contributions can feel like an easy place to make a saving because the benefit feels distant and the increase in take-home pay is immediate. However, it is important to recognise that the NHS Pension Scheme is one of the most valuable workplace benefits available and forms a significant part of an employee’s overall remuneration package. “The NHS Pension Scheme forms a significant part of overall pay and reward. While opting out may be unavoidable for some, it is important that people fully understand what they are giving up in exchange for a short-term increase in take-home pay. In many cases, they are walking away from future retirement income and valuable benefits that would be difficult and expensive to replace elsewhere.” As a defined benefit scheme, staff paying into the NHS pension get to build up a pension each year worth 1/54th of that year’s pensionable earnings – which excludes some money earnt, for example from overtime. The entitlement is increased every year by inflation, and when the staff member retires, they can claim a pension that is paid annually for the rest of their life. In contrast, most private sectors have defined contribution pensions which require them to invest money into assets, and then make their money last throughout their retirement. A Department of Health and Social Care spokesperson said: “While each individual will make their own choices, we want as many NHS staff as possible to benefit from the NHS Pension Scheme. To help make pension saving affordable, staff contributions are tiered according to earnings, with the lowest-paid members contributing 5.2 per cent of their pensionable pay. “It is also important that our hard-working NHS staff are paid fairly for the vital work they do, which is why – from April 2026 – 1.4 million staff, including nurses, received a 3.3 per cent pay rise, with additional funding for reviews of Band 5 nursing roles.” A spokesperson for the NHSBSA, which administers the NHS Pension Scheme, said: “The NHS Pension Scheme offers some of the most generous retirement benefits available in the UK, including guaranteed income for life in retirement, life assurance and ill health cover. “We would always encourage all members to use the guidance and tools available, such as their annual benefit statement, before making decisions around opting-out of the Scheme. Opting out will reduce members’ reward packages and affect their long-term financial security. “For those who have opted out, it’s important to know the door isn’t closed. Members can rejoin the Scheme at a later date, up to the age of 75, subject to their employer confirming eligibility, so we would encourage anyone who has opted out due to short-term financial pressure to keep this option in mind.”