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Employer contribution rate arrangements to remain for 2020/2021

The NHS Pension Scheme employer contribution rate increased on 1 April 2019 from 14.3% to 20.6%, plus an employer’s levy of 0.08%.

The Department of Health and Social Care’s consultation response announcing the rise, published in March 2019, confirmed the available funding to meet the associated costs and that a transitional arrangement would operate in 2019/2020 where employers in the Scheme would continue to pay 14.3%, plus the employer's levy of 0.08%.

We can now confirm that the transitional approach will continue in 2020/2021.

This means that for 2020/2021, all employers should continue to pay 14.3% in employer contributions plus the employer’s levy of 0.08% under their normal monthly payment process to the NHS Pension Scheme. NHS England will continue to make payments to the Scheme for organisations covered by the commitment to the NHS, and the Welsh Government for their equivalent organisations. A small number of ALB organisations will be invoiced directly by NHS Pensions for 6.3%.

As referenced in the consultation response, the 6.3% increase was split into two elements:

  1.  a 2.5% foreseen element, which was the increase expected at the time of Budget 2016
  2. an unforeseen element, accounting for the remaining 3.8% 

Organisations outside the scope of the commitment to the NHS will receive funding for the unforeseen costs and will have to manage the impact of the foreseen element, in a continuation of the 2019/2020 arrangement.

Following on from the article in the February 2020 employer newsletter, the specific contribution from university medical schools will remain as advised by the NHSBSA for 2019/2020.

For 2020/2021, non-NHSE ALBs will continue to receive the same available funding support. However, there will be an adjustment to the administrative arrangements which will be communicated directly to relevant organisations.