Nearly a quarter of a million (245,561) NHS workers have opted out of the NHS pension scheme in the last three years, according to a Freedom of Information request from the Health Service Journal.

The opt out rate of NHS workers is significantly higher than in other public service schemes.

Furthermore, a Freedom of Information requests from Royal London found that the opt out rate of NHS employees was 16 per cent, compared to 3.4 per cent for the teachers’ scheme, 1.45 per cent for the civil service scheme and 0.04 per cent for the armed forces scheme.

Royal London director of policy, Steve Webb, commented: “The NHS as an employer needs to take urgent action to tackle this epidemic of pension opt-outs.

“All public sector workers have faced a squeeze on their take-home pay in recent years, but it is in the NHS where this has translated into shockingly high numbers of people leaving the pension scheme.”

Public sector workers have faced a number of “squeezes” on their pay recently, including pay freezes, the ending of 'contracting our' and increased contributions, which could have led to the high opt out levels.

An NHS worker earning £25,000 per year currently has to pay 7.1 per cent into their scheme, and opting out would save them £1,420 per year.

However, replacing that pension in retirement would cost a lump sum of around £13,000, resulting in giving up pensions worth around nine times what they save.

Although some of the opt outs in the NHS scheme are due to senior consultants and GPs leaving because they have reached tax relief limits for high earners, NHS workers aged 26-35 were the most common age group to opt out, with 30,000 workers in this age band choosing to do so in 2017 alone.

Webb concluded: “Those who opt out will save money in the short term, but could lose nine times as much in the long-term in reduced pension rights.

“The NHS needs to find better ways to communicate the value of NHS pensions, otherwise large numbers of NHS staff risk a retirement in poverty.”

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