For those dedicated medical professionals that work tirelessly in the country’s health service, the NHS Pension Scheme is an attractive benefit. However, many remain unaware of the age at which they can retire.
For some doctors, retirement is something they do not want to contemplate. The thought of leaving a career to which they have devoted much of their lives can be daunting. For others, the end of such a demanding, challenging role and the likelihood of less stressful times ahead can be an occasion to celebrate.
Either way, it is important for healthcare professionals to plan carefully for a life after medicine and to fully understand the implications of their membership of the NHS Pension Scheme.
When can I collect my NHS Pension?
For medical professionals, when you can retire will depend on what section or which scheme you are in.
There are two different NHS Pension Schemes, one of which has two sections. The original scheme is split into the 1995 and the 2008 sections. A new and separate scheme was introduced on 1st April 2015, this is known as the 2015 Pension Scheme.
The 2008 Section and the 2015 Pension Scheme
For the 2008 Section the normal retirement age is 65 and the 2015 Pension Scheme this is your State Pension Age.
Under the 2008 Section and the 2015 Pension Scheme, the minimum pension age – the earliest age at which you can draw your NHS pension is 55.
But be warned.
Draw your NHS pension early and your retirement benefits will be reduced to reflect the fact that your pension will pay out for longer, with fewer contributions having been paid.
In fact, draw your pension at any age before your scheme’s normal pension age and you will face a reduction in your benefits.
1995 Section
Under the 1995 Section the normal retirement age is 60. The earliest you can start to draw your NHS Pension is from the age of 50, provided that you joined the scheme before the 6th April 2006 and have not had a break of more than 5 years, otherwise, your minimum pension age will be 55.
Members who have deferred 1995 Section benefits for service after 31 March 2000 and re-joined the scheme as a 2008 member cannot apply to claim their benefits from either Section until they reach the age of 55.
Yet again, if you draw your NHS pension early your retirement benefits will be reduced. Expect a reduction if you draw your pension before the age of 60, unless you have Mental Health Officer (MHO) status, in which case, subject to certain conditions being met, you can draw your NHS pension without penalty from age 55 onwards.
The Government has introduced legislation to increase the normal minimum pension age (NMPA) from age 55 to age 57 from 6 April 2028. The NMPA is the minimum age at which a pension scheme member may take their benefits within the standard retirement framework.
The legislation will protect members of registered pension schemes who before 4 November 2021 were members of pension schemes that gave the right as at February 2021 to start accessing their benefits under those schemes at or before 55.
Existing members with an entitlement to take benefits from age 55 will keep that right post April 2028
Drawing your NHS Pension and retiring from the profession aren’t the same thing
Just because you’ve started drawing your NHS Pension, it doesn’t mean you have to give up work. For those medical professionals who may be reluctant to hang up their stethoscopes for good, the NHS Pension Scheme will allow employers and employees to be flexible about retirement.
Since April 2023, all members have the option to Retire and Re-Join the pension scheme if you’re not ready to stop work altogether. You can retire and take your full pension, then return to work after a break of at least 24 hours and re-join the 2015 NHS Pension Scheme to earn further benefits.
Prior to 1st April this was not available for anyone drawing their 1995 Section benefits. You can return to the NHS or increase your working commitments without having your pension payments reduced or stopped (known as ‘abatement’). You can return and earn 2015 Scheme benefits even if you have 45 years of service in the 1995 and 2008 Sections, as long as you’re under 75.
If you decide to re-join the NHS, you can work as many hours as you choose straightaway – previously, members of the 1995 Section were limited to working 16 hours a week in the first month after retirement to avoid their pension payments being affected.
Partial retirement is already possible for pension you’ve earned in the 2008 Section or 2015 Scheme. Proposed changes that take effect on 1 October 2023 will also include any 1995 Section benefits you have. From age 55, you’ll be able to take between 20% and 100% of all your pension benefits in one or two drawdown payments, without having to leave your current job. This will also be the case for 2008 section and 2015 Scheme members as currently drawdown is limited to 80%.
Members of the 1995 Section who have a protected minimum pension age of 50 will also be able to claim pension benefits without leaving their job. To do this between the ages of 50 and 55, you’ll need to take 100% of your pension benefits. You can continue building your pension in the 2015 Scheme and you won’t need to take a break or change jobs.
To benefit from partial retirement, you must have a 10% reduction in pensionable pay (GP’s a 10% reduction in commitment) for 12 months after partial retirement. This is currently a requirement under the 2008 Section and 2015 Scheme. Guidance from the NHS will be available to assist in conversations between the employer and member on which Programmed Activities (PAs) are to be made non-pensionable.
How can Chase de Vere Medical help?
Because of the myriad of complex rules, when and how to draw your NHS Pension, or Pensions for those doctors with benefits in more than one section or scheme, can be a potential minefield and the need for well-informed decision making is crucial, particularly on decisions which could have repercussions for the 20 or more years that form your retirement.
Having a specialist NHS Pension adviser like Chase de Vere Medical on your side could prove invaluable.
You may be approaching retirement and looking to claim your NHS pension or have only recently joined the NHS. Whatever your personal circumstances we can help you prepare for life after medicine – that could even be considering funding your own care in old age or passing on your legacy to loved ones.
Structuring your pensions, savings and other financial assets correctly will help to maximise your retirement income.
As truly independent and specialist financial advisers to the medical profession, Chase de Vere Medical has the expertise and experience to support you in reaching your personal and financial objectives during retirement. To ensure you take the right steps toward your retirement, get in touch and speak to an independent adviser.
Content correct at time of writing and is intended for general information only and should not be construed as advice.