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Dynamising factor

When a pension scheme is based on historic earnings it is necessary to revalue those earnings so they do not lose value compared to current earnings. The method used in the NHS Pension Scheme is called dynamisation.

Dynamising factors for GPs initially revalued each year's earnings based on GPs´ intended net average remuneration determined by the Doctors and Dentists Pay Review Body. This was changed after 2004 to reflect the percentage annual increase in the GP profession's profits. The formula was changed again in 2008 to reflect the retail price index plus 1.5%.

The dynamising factor was the subject of a High Court battle between the BMA and the Department of Health after then Health Secretary Patricia Hewitt announced retrospective changes to the formula. The BMA won its case and was awarded legal costs when it was found that the health secretary had acted unlawfully.

More information:

Doctors and Dentists Pay Review Body


Department of Health