Can I buy added years on my NHS pension?

The Added Years scheme closed to new applicants in 2008. If you already have an Added Years contract, it continues. For members of the 2015 NHS Pension Scheme, the equivalent is buying Additional Pension (up to £7,352 per year of extra pension in 2026/27). Some employers also offer ERRBO (Early Retirement Reduction Buy Out) which removes the reduction for retiring early.

Is the NHS Additional Pension scheme worth it?

For most NHS staff, yes — it offers excellent value compared to private alternatives. You get tax relief on contributions, employer matching in some cases, and a guaranteed, inflation-linked pension for life. The break-even point is typically 12-18 years of receiving the pension. Given most people live 20+ years in retirement, it usually represents good value.

What is ERRBO NHS pension?

ERRBO (Early Retirement Reduction Buy Out) is a scheme that lets you pay extra contributions now to remove or reduce the penalty for retiring before your Normal Pension Age (typically 67 for the 2015 scheme). Without ERRBO, retiring 5 years early could reduce your pension by around 25%. ERRBO eliminates this reduction. It's available through your employer — not all trusts offer it.

How much is the NHS pension worth?

The NHS pension is one of the most valuable benefits in the UK. In the 2015 scheme, you accrue 1/54th of your pensionable pay each year, revalued annually by CPI + 1.5%. A nurse earning £35,000 for 30 years could build a pension of approximately £19,400 per year for life, plus a State Pension. The employer contributes around 23% — no private pension comes close.

NHS Pension Added Years and Additional Contributions — Is It Worth It? | PocketWise

The NHS Pension Scheme is one of the best workplace pensions available. But if you have gaps in service, work part-time, or want to retire early, you may want to boost it. Here are your options.

NHS Pension Scheme Overview

Feature	2015 Scheme (current)	1995/2008 Section (legacy)
Type	Defined benefit (guaranteed income)	Defined benefit
Accrual rate	1/54th of pensionable pay per year	1/80th (1995) or 1/60th (2008)
Revaluation	CPI + 1.5% per year	Based on final salary
Normal Pension Age	State Pension age (currently 67)	60 (1995) or 65 (2008)
Lump sum	No automatic lump sum — can commute pension	3× annual pension (1995 only)
Employer contribution	~23.7% of pensionable pay	~23.7%
Employee contribution	5.1%–14.5% (tiered based on salary)	Same

Option 1: Additional Pension (2015 Scheme)

This is the main way to boost your NHS pension if you are in the 2015 scheme.

Detail	Information
What it buys	Extra guaranteed pension on top of your normal accrual
Maximum purchase	£7,352 of extra annual pension per year (2026/27 limit)
How it works	You pay a lump sum or regular deductions from salary
Tax relief	Yes — contributions come from pre-tax salary
Inflation-linked?	Yes — the additional pension increases with CPI in retirement
Guaranteed?	Yes — defined benefit, not subject to investment risk

Cost Example — Buying £1,000 Extra Annual Pension

The cost depends on your age when you start — the younger you are, the cheaper it is.

Age at purchase	Approximate cost for £1,000/year extra pension
25	~£7,500
30	~£8,500
35	~£10,000
40	~£12,000
45	~£14,500
50	~£17,500
55	~£21,000

These are illustrative — exact costs from NHS Pensions.

Is Additional Pension Worth It?

Factor	Analysis
Break-even point	Typically 12–18 years of receiving the extra pension
Average retirement length	20–25+ years
Tax relief on contributions	Effectively reduces cost by 20%–45% depending on your tax band
Inflation protection	Additional pension rises with CPI — protects against inflation
Compared to saving privately	Very hard to match with a private pension or ISA — guaranteed and inflation-linked
Verdict	Excellent value for most people — especially younger members

How to Apply

Step	Action
1	Contact NHS Pensions (nhsbsa.nhs.uk/nhs-pensions) or your employer’s HR/pensions team
2	Request a quote for the amount of additional pension you want
3	Choose lump sum or regular contributions
4	Contributions are deducted from salary (pre-tax)

Option 2: ERRBO (Early Retirement Reduction Buy Out)

If you want to retire before your Normal Pension Age (67 for most 2015 scheme members), your pension is reduced. ERRBO removes this reduction.

Detail	Information
What it does	Removes the early retirement reduction for a specific earliest retirement age
Normal Pension Age	State Pension age (currently 67 for most)
Without ERRBO — retiring 5 years early	~25% pension reduction
Without ERRBO — retiring 3 years early	~15% pension reduction
With ERRBO	You choose your target retirement age — ERRBO removes the reduction
How you pay	Regular payroll deductions (pre-tax)
Available?	Only if your employer offers it — not all NHS trusts do

ERRBO Worked Example

Detail	Without ERRBO	With ERRBO
Annual pension at age 67	£20,000	£20,000
Retiring at 62 (5 years early)	£15,000 (25% reduction)	£20,000 (no reduction)
Difference per year	-£5,000	—
Over 20 years of retirement	Loss of £100,000	£0 loss
Cost of ERRBO	N/A	Monthly payroll deductions over working life

Important: ERRBO is employer-funded in terms of administration. Not all NHS trusts offer it. Ask your employer’s HR or pensions team.

Option 3: Added Years (Closed Scheme)

Detail	Information
Status	Closed to new applicants since March 2008
Who can still use it	Members who already had an Added Years contract before 2008
What it does	Buys additional years of pensionable service
How it works	Regular salary deductions
If you have an existing contract	Keep paying — it’s likely excellent value

If you have an existing Added Years contract, do not cancel it without taking specialist advice. These contracts are typically very good value and cannot be restarted once stopped.

Option 4: AVCs (Additional Voluntary Contributions)

Detail	Information
What	A separate savings pot alongside your NHS pension
Type	Defined contribution (money-purchase) — not guaranteed
Provider	Usually Prudential (for NHS Shared Cost AVCs)
Tax relief	Yes — deducted from pre-tax salary
At retirement	Can take 25% tax-free, use rest for income or annuity
Flexibility	More flexible than Additional Pension — can choose investments
Risk	Investment risk — value depends on market performance

Shared Cost AVCs

Some NHS employers offer Shared Cost AVCs where the employer also contributes. This is done through salary sacrifice, reducing your NI contributions too.

Feature	Standard AVC	Shared Cost AVC
Your cost	Full contribution from salary	Salary sacrifice — saves NI too
Employer cost	Nothing	Contributes via salary sacrifice arrangement
NI saving?	No	Yes — both employer and employee
Available?	Yes	Only if your employer offers it

Comparison — Which Option Is Best?

Option	Best for	Risk	Cost	Guaranteed?
Additional Pension	Boosting pension with certainty	None — guaranteed	Fixed (age-dependent)	Yes
ERRBO	Retiring before 67 without penalty	None — guaranteed	Fixed ongoing deductions	Yes
AVCs	Flexibility, lump sum at retirement	Investment risk	Variable	No
Added Years	Existing contracts only	None — guaranteed	Fixed	Yes

For most people: Additional Pension is the best option if you want guaranteed extra income. ERRBO is essential if you plan to retire early. AVCs offer flexibility but come with investment risk.

Tax Considerations

Point	Detail
Contributions reduce taxable income	All options are pre-tax — saves 20%–45% depending on your tax band
Annual Allowance	Total pension contributions (including employer) must stay within the £60,000 Annual Allowance to avoid a tax charge
NHS staff affected by AA	Higher earners (consultant-level) may breach the Annual Allowance — check your annual pension statement
Carry forward	Unused Annual Allowance from the previous 3 years can be carried forward

Who Should Definitely Consider Buying Extra?

Situation	Recommended action
Part-time worker with lower accrual	Additional Pension to top up
Career break reduced your pension	Additional Pension to fill the gap
Planning to retire before 67	ERRBO to remove early retirement penalty
Higher earner wanting flexibility	Shared Cost AVCs for NI savings and lump sum
Close to retirement with a shortfall	Additional Pension — but check costs as they’re higher for older purchasers

Action Checklist

Action	Done?
Log in to NHS Pensions (nhsbsa.nhs.uk/member-hub) and check your Total Reward Statement	☐
Calculate your projected pension at NPA and at your target retirement age	☐
Ask your employer if ERRBO is available	☐
Request an Additional Pension quote	☐
Check whether your employer offers Shared Cost AVCs	☐
Review your Annual Allowance position (especially if earning £50,000+)	☐