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The flexible NHS options, such as partial NHS retirement or ‘retire and rejoin’, plus how and when you can access your NHS pension
There is an increasing focus on offering nurses flexibility over retirement, including options to take pensions while they continue to work. NHS Employers argues such opportunities offer benefits to individuals and to the NHS alike. For organisations, it is a chance to retain experienced staff for longer.
Nursing Standard. 39, 8, 11-12. doi: 10.7748/ns.39.8.11.s4
Published: 31 July 2024
For individual nurses, there is the potential to enjoy greater work-life balance while still having a salary. However, research suggests many nurses are missing out on money simply because of a lack of awareness of these options and how they work.
» 55: Minimum pension age, so the earliest point at which someone can withdraw their savings from an NHS pension. It applies across all NHS pension schemes. The age will increase to 57 from 6 April 2028
» 60: The normal pension age for anyone in the 1995 NHS pension scheme. This is the point at which someone can withdraw funds from their pension without any reduction in benefits
» 65: The normal pension age for the 2008 NHS pension scheme
» 66: The current age from which the state pension can be claimed. The state pension age also generally acts as the normal pension age for those in the 2015 scheme
» 75: The age at which membership of the NHS pension scheme ends
» Annual pension statements will show to which scheme you belong. Call the NHS Business Services Authority on 0300 330 1346 to find out
» From 1 April 2022, everyone with an NHS pension is part of the 2015 scheme. However, anyone who was in the 1995 or 2008 section keeps the benefits they earned in those sections up to that date
What is flexible retirement?
‘Flexible retirement’ is an umbrella term that describes a gradual move towards retirement – one which combines continuing to work while also starting to enjoy benefits associated with retirement. This can include being able to access pension benefits.
For nurses wanting to draw money from their pension while keeping a salary, there are two main options: partial retirement (drawdown) and ‘retire and rejoin’.
Recent changes to the NHS pension scheme means these options are open to more nurses than ever before.
What does partial retirement involve in practice?
Partial retirement allows a nurse to reduce working hours while taking some or all of their pension and continuing to pay into the pension scheme.
Also known as drawdown, it is now available to anyone who has reached the minimum pension age (currently 55; rising to 57 in 2028). Those who choose this option can take from 20-100% of a pension without having to leave employment. This can be done twice.
Those who partially retire must reduce their pensionable pay by at least 10% for 12 months starting from their partial retirement date. The reduction could come from working reduced hours, for example, or taking on a different role. This has to be agreed with an employer, and terms and conditions of employment amended accordingly.
NHS pensions specialist Graham Crossley, of finance specialists Quilter, reports that this can sometimes present a challenge.
Some employers refuse partial retirement requests and others are reluctant to let nurses who want to take partial retirement carry on at the same band.
He advises nurses who are interested in partial retirement to talk to their employers before they reach 55. ‘It’s easier to give them a heads-up you’re thinking about it and a few years to sort it out rather than a few months.’
What is ‘retire and rejoin’?
In retire and rejoin – sometimes known as ‘retire and return’ – a nurse leaves NHS employment and takes their full pension. They are then reemployed on a new contract and can also rejoin the pension scheme. The ‘new’ role can be exactly the same as the old one.
‘With retire and return, you’re effectively giving up your contract and then the employer engages you again on a new contract,’ explains Mr Crossley.
There must be at least a 24-hour gap between retiring and returning, though some trusts insist on longer.
‘Some people will then get concerned their employer may not take them back,’ he says. ‘That’s the one risk, but the good thing about retire and rejoin is that you are able to take all of your pension and come back to work with no limit on the earnings you can have.’
Who might find partial retirement or retire-and-rejoin to be good options?
For partial retirement, there are lifestyle considerations that come into play. Any nurse wanting to reduce working hours and ease into retirement while still earning money should consider it as an option.
For a specific group of nurses there are also financial issues to consider with partial retirement and return and rejoin. Anyone who was part of the 1995 pension scheme is losing money if they carry on working full-time past their retirement age.
‘That scheme was designed when pension and retirement planning was very binary,’ explains Mr Crossley.
‘There was no provision for people who carried on working past 60 and so there is no enhancement to the pension for late retirement. If you don’t take your pension at the normal age, you are losing pension on a monthly basis.
‘If you’ve reached minimum pension age and you’re in the 1995 section then you should definitely explore partial retirement or retire and rejoin.’
See analysis, page 25
Podcast: if you’re thinking about leaving the NHS pension scheme, listen to one expert’s advice rcni.com/why-stay-in-pension
