DoH proposes delayed pension contribution rise for lower-paid

8 Dec 11
The government has offered to postpone the planned rise in NHS pension contributions for lower-paid workers, meaning almost half the staff would not pay more next year.
By Richard Johnstone | 8 December 2011

The government has offered to postpone the planned rise in NHS pension contributions for lower-paid workers, meaning almost half the staff would not pay more next year.

The move follows consultation on ministers’ controversial plans to increase contributions for public sector workers by an average of 3.2%. Under the Department of Health offer, the salary threshold for 2012/13 would be raised from £15,000 to £26,557.

This would protect a total of 630,000 staff from next April’s contribution increases. However, some higher paid workers would pay more.

Unions have previously criticised the decision to apply the £15,000 threshold to full-time equivalent pay, not actual pay. Therefore, someone working part-time and earning £14,000 a year would be considered to be earning £28,000 for the purpose of deciding contribution hikes.

Responding to today’s announcement, unions warned the plans would still hit the pockets of thousands of nurses, paramedics, occupational therapists and other NHS staff.

The DoH said that the new deal would still achieve the overall level of savings of £530m in 2012/13, with larger increases for higher earners.

Health Secretary Andrew Lansley said: ‘Having listened to staff and stakeholders, we have improved our proposals so that an extra 530,000 NHS staff will not pay any more into their pensions next year.

‘Public service pensions will remain among the very best available, providing a guaranteed pension level for all employees – today very few private sector employers still offer this. But people are living longer and pensions are costing taxpayers more and more every year.’

Some health staff, including members of the Unison, Unite and GMB unions, took part in the day of action over pension changes last week. Around 79,000 working in the English health service went on strike, according to the government, approximately 14.5% of all NHS staff.

Unison’s head of health, Christina McAnea, said that a one-year delay to increased contributions was ‘cold comfort’. 

She said: ‘Having an increase looming large when the cost of everyday essentials like food and heating is rising so fast is a nightmare for cash-strapped families.’

Other major health unions, including the British Medical Association, the Royal College of Nursing and the Royal College of Midwives, did not take part in last month’s strike, but will vote on the proposals next year.

BMA chair Dr Hamish Meldrum said that today’s announcement of some steeper increases would ‘intensify the anger’ of doctors.

‘There is already a system of tiered contributions in the NHS pension scheme, with the highest-paid staff paying most. Doctors contribute up to 8.5% of their pay for their pensions – among the highest in the public sector.’

The RCN has dismissed the proposal from Lansley as ‘divisive and provocative’.

General secretary Dr Peter Carter said that the proposal would still lead to more than two-thirds of nurses paying increased contributions.

The director of the NHS Employers organisation Dean Royles said that he hoped the offer would ‘create an environment where we can have substantive discussions on the broader issue of pension reform’.

He added: ‘We will play our part in those conversations to ensure an outcome that delivers for employers, for staff and for patients and avoids further industrial action in the NHS.’


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