Step Down (Voluntary pension protection)

A new feature of the 1995 section of the NHS Pension Scheme supports members wishing to 'step down' to a less demanding job, involving a pay reduction of least 10%, in the run up to retirement. The arrangement allows them to protect their higher rate of pay of for the purposes of their pension when they retire.

Effectively, the pension the member has already earned before the step-down will be frozen on the higher pensionable pay. A second pension, based on the member’s stepped down pay will be started. The frozen pension will also be kept up to date with cost of living increases. On retirement, both pensions will be added together.

Members who want this to happen must make a request in writing to their NHS employer or NHS Pensions within three months of their pay going down.

They must also

  • have reached age 50
  • have at least 2 years pensionable service
  • confirm that the reduction will be for at least 12 months
  • have not previously protected their pay using this option

Members can, on reaching minimum pension age, choose to ‘step down’ to a lesser-paid job but have their higher rate of pay protected for the purposes of their pension when they retire. This applies when pay goes down by at least 10%, but can be applied for only once.

Effectively, the pension the member has already earned before the step-down will be secured on the higher pensionable pay. A second pension, based on the member’s stepped down pay will be started. The first pension will also be kept up to date with cost of living increases. On retirement, both pensions will be added together.

If you want this to happen you must request this by writing to NHS Pensions within three months of your pay reducing.

Q. What is step down?

A. If you decide to downgrade to a less demanding role and your pay is reduced by at least 10%, you can apply for voluntary pension protection (step down).

Q. Will I benefit at retirement for protecting my pension?

A. Yes, this is because the pension you have already earned before the step-down will be based on the higher pensionable pay. You will then start a second pension based on your stepped down pay. The first pension will also be kept up to date with cost of living increases. When you retire both pensions will be added together.

Q. Do I have to be over a certain age to apply for this?

A. Yes you must be age 50 or over.

Q Is there a limit on the amount of times I can voluntarily protect my pension.

A. Yes – once.