NHS Pension Retirement Flexibilities

Matthew Harrington
Financial Planning, Healthcare
Matt Harrington

In recent correspondence to members, the NHS Business Services Authority (BSA) has set out details of proposed changes to the NHS Pension Scheme, aimed at introducing additional flexibility for members at retirement

Matt Harrington

Whilst the proposals are yet to be confirmed by the Department of Health and Social Care (DHSC), this is certainly welcome news for scheme members, with particular highlights being the scrapping of the 16-hour working limit for the first month following partial retirement (a rule which was suspended during the Covid pandemic but was set to be reintroduced this year), and allowing 1995 section members to join the 2015 section after claiming their pension.

Given the difference in normal retirement ages for the various sections of the schemes, the new flexibilities could help members take more control of their retirement planning, providing a balance between working hours, income and their future pension needs in the lead up to retirement.

Furthermore, with the proposed introduction of partial retirement being available across all sections, this could potentially provide a more balanced approach to retirement, particularly for those encountering annual allowance and pension input issues, as the rules require a 10% reduction in pay/work commitments. This option could help to avoid a situation where members are having to limit membership in the scheme, or opt-out entirely, without sacrificing overall income. Care will need to be taken in these instances though, to ensure that members are protecting their income needs both during their working life and looking ahead to retirement.

The timings for the proposed changes are set to be staggered, with the rules on ‘retire and return’ set to be amended as of April 2023, and the changes to partial retirement (or ‘drawdown’) being introduced from October 2023.

For those that may not have seen the details, the NHS website has a dedicated page detailing your options for a flexible retirement. 

Whilst the proposed changes will hopefully enable members to better tailor their pension and retirement planning to their own personal circumstances, it will be important to understand the wider implications of any decisions.

If members are considering their retirement plans over the next 12 months, these proposals should be taken into consideration, and for those wishing to review their options our healthcare and financial planning teams can provide expert advice and guidance to help you ensure you are making the right choice for your retirement.

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