NHS Added Pension and AVC Payback: Is It Worth It?

You can add to your NHS pension in three main ways, and the question people ask is always the same: how long until it pays back? This guide sets out the verified rules for additional pension (often called added pension), how it differs from an AVC, and gives you a free payback calculator to test a real quote. Our AVCs guide covers the money purchase side in more depth.

The three ways to add to your pension

Sources: NHSBSA additional pension page, NHSBSA knowledge base article What is additional pension? and the 2015 Scheme members' guide (V13, May 2024), which also names the AVC providers at that date. Check NHSBSA for the current providers.

Additional pension: the verified rules

• ✓ Open to active members of the 2015 Scheme, and payments must be completed before your Normal Pension Age
• ✓ You buy a set amount of annual pension: minimum £250, maximum £9,053 from 1 April 2026 (NHSBSA)
• ✓ Pay by a single lump sum or by monthly instalments for 1 to 20 years, and not by salary sacrifice
• ✓ The cost depends on your age and NHSBSA says a calculator quote is only valid until your next birthday
• ✓ Revalued by a Treasury Order each year before you retire, which may increase or decrease it, and index linked after you retire
• ✓ You can choose whether it is just for you or also provides benefits for your dependants when you die
• ✓ Pension contributions are taken from pay before tax, so you receive tax relief (NHSBSA members' guide)

Our other tools help with what comes next: the NHS Pension Calculator projects your pension, and the retirement age checker shows how early retirement reduces it, which also applies to extra pension you have bought.

How to work out the payback

Extra pension is a purchase, so the sum is simple. First take off any tax relief to get the net cost. Then divide by the extra pension you will receive each year. The answer is how many years of receiving it it takes to get the net cost back, in today's money.

The quote above is hypothetical, chosen only to show the arithmetic. It is not an NHSBSA price. Your cost depends on your age and could be much higher or lower. The implied real return is what the net cost would have had to earn above inflation, paid out as the extra pension, if you live to 85 and the pension starts 20 years from now.

Two things the payback figure does not show. If you die before the payback age and chose cover for yourself only, you get less back. And pension income is taxable, so the pension is worth less after tax than the figure shown, which is why the calculator reports the pension before tax and says so.

Test your own quote

Get a quote from NHSBSA's additional pension calculator, then enter the cost and the pension it buys below.

Additional pension or an AVC?

There is no single answer, but the trade is clear:

• Certainty. Additional pension gives a known amount of index-linked pension. An AVC depends on investment performance and charges.
• Flexibility. An AVC pot can be taken partly as tax-free cash and partly as cash or pension, which suits people who want choices at retirement. Additional pension is pension only.
• Longevity. Additional pension pays most to people who live long, and less to those who do not unless dependants' cover is included.
• Cost. Additional pension costs more the older you are. An AVC is not priced by age, but outcomes vary.

Before you buy extra pension

• ✓ Get a quote from the NHSBSA additional pension calculator and note it is only valid until your next birthday
• ✓ Test it here for the payback and implied return, and compare quotes with and without dependants' cover
• ✓ Check your limit: minimum £250 and maximum £9,053 a year from 1 April 2026
• ✓ Ask whether you would rather have guaranteed pension or a flexible AVC pot
• ✓ Think about your Annual Allowance if your pension growth is already high
• ✓ Remember retirement age: early retirement reduces pension you have bought, so see the retirement age checker