For most NHS staff the pension is the largest deduction on the payslip after income tax, often more than National Insurance. The calculator above shows what it costs you in take-home pay. It's harder to see what you get in return, because the benefit arrives decades later as an income rather than a pot. This guide explains how to put a value on it, which matters when you're weighing an agency shift, a private-sector offer or the temptation to opt out.
What each year of work builds
The current NHS Pension Scheme, the 2015 scheme, is a career-average scheme. Each year, one fifty-fourth of your pensionable pay is added to your pension account. That amount is then increased every year while you're still working, by the rise in consumer prices plus 1.5%, so it keeps growing in real terms. At your normal pension age, which is linked to your State Pension age, the total becomes an income for life that rises with inflation.
A Band 6 nurse on the entry rate of £39,959 adds about £740 a year of pension for that year's work, in today's money, before the annual uplift. A Band 5 starter on £32,073 adds about £594. Those amounts sound small until you add them up: twenty-five years in the low Band 6 range builds a guaranteed pension of roughly £18,500 a year in today's terms, before the extra 1.5% a year above inflation is counted.
What it costs, and why it costs less than it looks
Your contribution is a percentage of all your pensionable pay, set by tier, from 5.2% to 12.5%. Because the scheme is a net-pay arrangement, the contribution comes off before income tax, so a basic-rate taxpayer's take-home falls by 80p for every £1 contributed, and a higher-rate taxpayer's by 60p. National Insurance is still charged on the full salary.
Your employer contributes far more than you do: 23.7% of your pay, which never appears on your payslip. On a £39,959 salary that is about £9,470 a year going into the scheme on your behalf. If you opt out, that employer contribution doesn't come back to you as pay. It simply stops.
Putting a value on it
One way to see what the pension is worth is to ask what a guaranteed, inflation-linked income would cost to buy privately. At retirement, a lifetime income that rises with inflation typically costs somewhere around twenty to thirty times the starting annual income, depending on your age and interest rates at the time. Each £740 a year of NHS pension is therefore worth many thousands of pounds in today's money, for a net cost to a basic-rate Band 6 of around £3,100 a year in contributions after tax relief. Few private-sector jobs offer anything comparable, which is why a higher private salary can still be a worse deal overall.
Opting out rarely pays
Some staff opt out to increase take-home pay, especially early in their careers or when money is tight. The take-home gain is real but the cost is large. You lose the employer contribution, you lose the inflation-proofed income for that year permanently, and you lose the scheme's ill-health and death-in-service benefits, which protect your family if the worst happens. If cash flow is the problem, reducing hours or reviewing other costs is usually better value than leaving the scheme. You can rejoin later, but the years you were out don't come back.
Next steps
Pick your band and step above to see the contribution and take-home for 2026/27. If you work in or around London, the NHS London weighting calculator shows how HCAS adds to pensionable pay. If you work nights or weekends, the NHS unsocial hours calculator shows how enhancements change your pay and pension tier.
For a longer walk-through, see our guide NHS pay bands explained, with take-home pay at every Agenda for Change band.