The aim of the final pay control regulations in the 1995 Section of the NHS Pension Scheme is to protect the NHS Pension Scheme against the costs of excessive increases in pensionable pay at or before retirement.
Employers are charged if they give a scheme member an increase in pensionable pay which is above an allowable amount in the final 3 years of their employment.
Understanding when final pay controls apply
Final pay controls are applicable to all official (including non-GP Provider) members of the 1995 Section of the Scheme, including 1995 / 2015 transition members who retire or transfer out of the NHS Pension Scheme to another scheme.
They do not apply to members of the 2008 Section or 2015 Scheme of the NHS Pension Scheme.
The allowable amount
The allowable amount is the amount that a member’s pensionable pay can increase by in their final 3 years before the employer is liable for a final pay control charge.
The allowable amount is the lesser of the:
- member’s pensionable pay in the relevant year
- member’s pensionable pay in the previous year, plus the consumer prices index (CPI), measure of inflation plus 7%
- percentage increase in the member’s pensionable pay for the current year compared with the previous year
The allowable amount was increased from the CPI measure of inflation plus 4.5%, to CPI plus 7% from 1 July 2021. This increase will also be applied retrospectively to 1 April 2018.
If you’ve paid or received an invoice for a final pay control charge on or after 1 April 2018 you can find more information on how you can request for this to be reviewed on this page.
This request needs to be made by midnight 31 December 2021.
How final pay control charges are made
When submitting a member’s retirement application form (an AW8), you must also complete and return the final pay control supplementary form - FPC1 (PDF: 232KB).
The completed form must be returned in PDF format. If you do not do this, your form will be returned.
Where an employee has 2 or more employers, the one that increased the pensionable pay will be liable.
If the invoice is not paid, then interest and an administrative levy is added to the charge.
Applying for retrospective final pay control charges to be reassessed from 1 July 2021 until 31 December 2021
Any final pay control charges calculated on or after 1 July 2021 will take into account the revised CPI percentage and the new exemptions introduced to final pay controls. These are being applied retrospectively from 1 April 2018.
If you’ve paid or received an invoice for a final pay control charge on or after 1 April 2018 you can request for this to be reviewed.
To request to have your charge reassessed, you must complete and return the final pay control reassessment application form (PDF: 180KB).
The completed form must be returned to email@example.com in PDF format. If you do not do this, your form will be returned.
Your request for reassessment must be received by us by 31 December 2021.
Any requests received on or after 1 January 2022 will not be actioned. There are no exceptions to this deadline.
Once we’ve received your application, we’ll assess if an exemption applies.
You'll be reimbursed the relevant amount if the reassessment is approved for final pay control charges already paid, if appropriate.
If any amount of final pay control charge remains outstanding, a notice will be issued to the employer, or in the case of a non-GP provider, the practice. This charge will need to be paid to us within one month.
If you’ve not yet paid a final pay control charge issued between 1 April 2018 and the 1 July 2021, you can also have the charge reassessed. Interest and administrative charges may still be applied for any late payment. If your reassessment is approved, your organisation will receive a credit note for the relevant amount.