NHS Pension vs SIPP Calculator

It compares the pension you would build in the NHS 2015 CARE scheme against investing comparable money in a SIPP instead, the guaranteed income each would produce, the investment return a SIPP would need to match the scheme, and what happens to death-in-service and survivor benefits along the way.

It is a comparison, not a recommendation. Leaving the NHS scheme is a regulated advice decision with consequences this tool does not model, and nothing here should be read as a suggestion to do it. For the mechanics behind the comparison, read the NHS pension vs SIPP guide.

One input decides most of the answer, and it is not the investment return.

• How much of the employer contribution you could actually capture. The headline scheme rate is 23.7%, but employers only really pay 14.38% of it, the other 9.4% is met centrally and never passes through your employer, so it cannot follow you out of the scheme. Whether even the 14.38% is capturable depends on how you work, and the tool pre-fills that: 0% salaried and 0% for a locum, because in neither case would the money reach you; 14.38% for a partner, whose profit share rises when the practice stops paying it. You can override it.
• The NHS side. Pensionable pay accrues at 1/54th a year and everything already earned is revalued at 1.5% above inflation while you remain active.
• Your own contribution. Charged on the slab system: the whole of your pensionable pay is charged at the single rate its total falls into, from 5.2% to 12.5%. The tool warns you when your pay sits just below a threshold, because crossing it re-rates everything rather than just the excess.
• The SIPP side. Contributions are invested at the start of each year and compounded at the real return you set, then turned into a comparable income by the drawdown rate you choose. Everything is modelled in real terms, so inflation nets out of both sides and no forecast of it is needed.
• The break-even return. Rather than solving algebraically, the tool walks a grid of real returns from 1% to 11% in half-point steps and reports the first that matches the NHS pension. If none does, it says so, which is itself the answer.
• Death and survivor benefits. Death in service is shown as a range because two bases exist: 2.025× your prospective pension and 2× pensionable earnings. The survivor’s pension is 33.75% of yours, and a younger partner draws it for longer, so their age changes the lifetime figure.

A GP aged 40 with £70,000 of pensionable pay, 25 years to retirement, assuming a 5% real return and a 3.5% drawdown rate. The NHS side is the same either way: a guaranteed £38,971 a year for life, from a member contribution of £8,750 at the 12.5% tier.

Salaried or locum. None of the employer’s £10,066 a year is capturable, so the SIPP receives your £8,750 alone. That grows to £438,493, giving £15,347 a year, £23,623 a year less than the scheme. No return anywhere on the grid, which runs to 11% a year above inflation, closes that gap.

Partner. Now the 14.38% does come back as profit share, so £18,816 a year goes in, more than double. The pot reaches £942,935 and yields £33,003, still £5,968 a year short. The break-even return is 6.5% a year above inflation, against the 5% assumed here.

And that is before the benefits that are not income. Die in service in this example and the scheme pays somewhere between £78,915 and £140,000, where a SIPP pays out only what has accumulated so far, near nothing in the early years. A surviving partner would receive £13,153 a year for life, around £683,934 undiscounted over a normal lifespan.

Figures are estimates for England & Wales in real terms, and none of this is financial advice. The gaps that matter most:

• Income is compared gross. Both sides are shown before tax, and the two are not taxed identically. A SIPP allows a tax-free lump sum and lets you control the timing of withdrawals, which a scheme pension does not. The guide covers the differences.
• Investment risk is a single number. A real return you type in is certain by construction. An actual portfolio is not, and the NHS pension carries no investment risk at all, a difference no break-even figure can express.
• One scheme year’s figures. The contribution tiers are the ones in force from 1 April 2026. They are re-indexed each April, so a projection running decades ahead holds today’s rate structure fixed throughout.
• Ill health, and leaving and returning. Ill-health retirement, opting back in, the five-year deferral break and the revaluation you would lose as a deferred member are not modelled.
• Legacy service and the McCloud remedy. Only 2015 CARE accrual is compared. Benefits in the 1995 or 2008 sections are unaffected by anything you do now and sit outside this comparison. See the McCloud remedy guide.
• The annual allowance. Contributions on either side can bring it into play, which is a separate calculation. See the annual allowance calculator.