Departmental Pensions

Health written question – answered on 30th April 2008.

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Photo of Danny Alexander Danny Alexander Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey

To ask the Secretary of State for Health what the effect on his Department's expenditure would be of increasing the employee contribution to each pension scheme for which his Department is responsible by 1 per cent.; and if he will make a statement.

Photo of Ben Bradshaw Ben Bradshaw Minister of State (Regional Affairs) (South West), The Minister of State, Department of Health

Increasing the member contribution for the NHS Pension Scheme by 1 per cent. across the board would yield approaching £330 million per annum to the scheme, based on a pensionable payroll of approaching £33 billion over the 12 months to 31 March 2007.

Until 31 March 2008 the NHS Pension Scheme contribution rate was six per cent. of pensionable pay, however, members classed as manual workers paid five per cent. Employees' contribution rates to the NHS Pension Scheme have been increased from 1 April 2008 as shown in the following table. This will produce an estimated yield of about 6.5 per cent. an increase of about 0.5 per cent. over the previous contribution structure. There is no change to the Department's expenditure from this increase.

Pensionable pay Contribution rate ( percentage )
Up to and including £19,682 5
£19,683 to £65,002 (linked to Agenda for Change pay point 17) 6.5
£65,003 to £102,499 (linked to Agenda for Change pay point 49) 7.5
£102,500 to any higher amount 8.5

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