Reduced USS pension contribution rates confirmed

Colleagues who are members of the USS pension scheme will pay a reduced contribution rate from this month, after a number of changes were confirmed.

As a part of the 2023 USS Scheme Valuation, both individual members and the University will now contribute less into the USS scheme, as well as see improved benefits from April. These include members building up benefits at a higher rate and seeing a one-off increase applied to the annual pension they get after they retire.

Colleagues who are Grade 6 and above are eligible to be members of the USS pension scheme. Current members will have been contacted by USS directly.

Find out more about joining USS, or other pension schemes available to you, on our Pensions webpage or by contacting the Pensions team.

These changes were proposed to the USS Trustee by the Joint Negotiating Committee, following consultation with employers at the end of 2023, and were agreed at the end of December.

Colleagues will also pay reduced National Insurance contributions from this month, as a national reduction comes into effect.

USS pension changes explained

From 1 January 2024

Reduced contributions:

• Members will now contribute 6.1% from their salaries into the scheme every month, instead of 9.8%.
• The reduction applies to employers too, so the University will now contribute 14.5% of member salaries instead of 21.6%.

From 1 April 2024

Improved benefits:

• The rate at which USS members build up money in their Retirement Income Builder (the defined benefit part, which is based on your salary and length of service) will increase from 1/85 to 1/75 of salaries from 1 April 2024.
• A salary threshold increase, meaning a greater proportion of pension payments will go into the Retirement Income Builder and not the defined contribution part (which is based on how much you pay in).
• The cap for future pension increases will rise from 2.5% to a maximum of 10%.
• A one-off uplift of £215 to members’ annual pensions, and an associated £645 retirement lump sum. See the USS one-off uplift FAQs for conditions you must meet.

Read more about the changes and what they mean to you on the USS website.