Announced today over half a million extra staff will not need to pay any extra into their pensions next year. The government response to the consultation on proposed increases to employee contribution rates raises the threshold for freezing pension contributions in 2012/13. It will affect 630,000 staff in the NHS who earn up to £26,557 almost half the members of the NHS Pension Scheme.
This change will protect the lower paid in the NHS. The increase in employee contributions is shared among higher earners where the impact is offset by the benefit of tax relief for higher rate taxpayers.
Proposals for employee pension contributions in 2013/14 and 2014/15 and other changes following the Hutton review will be subject of further discussion with Trades Unions.