The NHS Employers website has information on the ‘McCloud remedy’ including how it interacts with scheme benefits and pension taxation. The Ready Reckoner does not implicitly allow for the McCloud remedy.

Summary

Your rating

Based on your inputs, the ready reckoner estimates that:

  • The estimated total cost of scheme membership over 2025/26 is , of which your "net" contribution was .
  • The estimated extra pension built up over 2025/26 is paid every year for life from retirement.
  • A green or amber rating does not necessarily mean that your pension growth will be under the Annual Allowance in practice as the outcome depends on your data inputs and there are several limitations as stated throughout the Ready Reckoner.
  • The estimated breach of the Annual Allowance in 2025/26 is , although this may be lower or zero depending on any unused AA you may have to carry forward. The AA tax charge from any breach will depend on your taxable income over the year with your marginal rate of income tax applying to the breach – likely to be 40% to 45%.

If you have an AA tax charge to settle, then there are options on how it is paid – including Scheme Pays. This is a facility where the scheme will pay the charge on your behalf, record this debit on your account, increase this debit with interest and a deduction will be made to your benefits at retirement. For example, where the AA tax charge from the 2015 Scheme amounts to £1,000 when retiring at age 65, the deduction to pension at retirement would be £1,000 / 18.33 = £55 pa (using the current Scheme Pays recovery factor).


You can find more information on both the NHS Pensions and NHS Employers websites.


Even where an AA tax charge has been triggered, it will often be the case that the scheme still provides good value. If you are at all uncertain about your position, then you should consider seeking professional guidance.

Your Threshold Income

Your Pension Input Amount

What can I do to understand my options further?

Warnings and limitations

This tool is a "ready reckoner", which means that all calculations are estimates only and should not be relied upon for accounting or other purposes. This tool cannot replace what a tax accountant or an independent financial advisor can do. If you are at all uncertain about what to do next then you should consider seeking professional guidance.


Remember that the Ready Reckoner is only as good as the information you input into it. Even minor changes to these inputs, or changes to external factors in your finances, could vary your pensions tax position considerably. Other factors that may alter your actual pensions tax position from that estimated by the Ready Reckoner include the following:

  • Any late retirement factor that may be applied to your pension if you work beyond your normal retirement date (in the 2008 Section or the 2015 Scheme) is not included in the Ready Reckoner’s calculations. The application of a late retirement factor may increase your pension input amount (PIA).
  • The main two scenarios where simplifications within the Ready Reckoner may understate your Annual Allowance position are:
    • 2008 Section membership: The Ready Reckoner assumes that your 2024/25 and 2025/26 pensionable pay figures are the salary levels that will be used to calculate your pension. This is not necessarily the case and the definition of ‘final salary’ differs between the 1995 Section and the 2008 Section. Where you have had a significant increase in pensionable pay in the last few years, this may understate pension growth. If you have 2008 membership you may wish to enter your 2024/25 reckonable pay as the Ready Reckoner does not allow for any three-year averaging.
    • A mix of officer and practitioner service before April 2015: The ready reckoner is not programmed to handle a mix of officer and practitioner service in the 1995/2008 Scheme so may understate pension growth where this is the case.
  • The Ready Reckoner makes no allowance for any other pension contributions other than those paid in respect of the NHS Pension Scheme. If you have made pensions contributions elsewhere this could alter your (tapered) Annual Allowance.
  • The PIA calculated by the Ready Reckoner excludes any non-NHS pension growth. Only your NHS Pension Scheme growth is accounted for in the Ready Reckoner.
  • The Ready Reckoner does not include a facility to account for pension sharing orders and divorce settlements.
  • Standard tax rates are applied for the 2025/26 tax year.
  • As a result of the so-called "McCloud remedy", all NHS Pension Scheme members are building up benefits in the 2015 Scheme from 1 April 2022. This element of the McCloud Remedy is allowed for in the Ready Reckoner. There is another element of the McCloud Remedy which will affect anyone who was an active member of the NHS pension scheme on both 31 March 2012 and 1 April 2015. Affected members may have a retrospective change of pension scheme within the period 1 April 2015 to 31 March 2022 and a reassessment of tax liabilities. No allowance is made within the Ready Reckoner for any change to past benefits built up as a result of the McCloud Remedy. You can read more about the McCloud judgement here: https://www.nhsemployers.org/pay-pensions-and-reward/pensions/mccloud-judgement.
  • The Ready Reckoner makes no allowance for annualisation of pensionable pay for Practitioner members. If you are a Practitioner member, this may have an impact on the Ready Reckoner’s assessment of your Threshold Income.
  • The Ready Reckoner assumes that member contribution tier boundaries will be updated in line with the 2025/26 pay award.
  • The Ready Reckoner does not make allowance for pension growth arising from any ongoing Added Years contracts. If you have an ongoing Added Years contract, the Ready Reckoner may understate your pension growth.

Neither First Actuarial nor NHS Employers accepts any responsibility or liability for the data inputted into the Ready Reckoner, its output and the interpretation of that output, or any subsequent decisions you may take or tax liabilities that may arise, following its use. The Ready Reckoner is an awareness tool only, and we strongly encourage you to obtain professional financial advice to fully understand your position, and/or before taking any action.

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