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Retirement

Before you start

You should read:

 

Reason for retirement

The information and forms you will need may change depending on the reason for a member’s retirement.

Age

The normal pension ages in the NHS Pension Scheme are:

  • 1995 Section of the 1995/2008 Scheme:
    • 55 if the member has special class status
    • 60
       
  • 2008 Section of the 1995/2008 Scheme:
    • 65
       
  • 2015 Scheme:
    • Same as the member’s state pension age or age 65, whichever is later
       

Members can retire earlier or later depending on the Section or Scheme they are in.

The NHS Pension Scheme overview provides more detail about each Scheme.

Read our Age retirement FAQs (PDF: 234KB).

Redundancy

Read our factsheets for information about members retiring either:

  • in the interests of efficiency of the service
  • on redundancy

Redundancy basic overview employer guide (PDF: 427KB)


You may need to use the redundancy calculator:

Redundancy calculator (Excel: 224KB)

Redundancy calculator guide (PDF: 298KB)

 

Forms you may need:

Complete and return the Redundancy supplementary information checklist (Word: 129KB) with a completed retirement benefits claim form (AW8). Return by email if submitting the form on POL.

Complete the Retirement on grounds of interests of efficiency checklist (PDF: 299KB) if the reason for retirement on the AW8 is 'Early Retirement (IOE)'.

Complete the Concurrent pensionable employment (AW343) (PDF: 138KB) where the member is both:

  • leaving on grounds of compulsory redundancy
  • has concurrent pensionable employment, including Practitioner membership, in the NHS

2008 Section Optants

Read our factsheet for information about members who have elected to move from the 1995 Section to the 2008 Section, as part of the original Choice exercise.

2008 Section Optants (PDF: 188KB)

Drawdown

Read our factsheets for information about Drawdown. This is only applicable to members of the 2008 Section and 2015 Scheme.

Draw down application factsheet (PDF: 205KB)

Pay increases within 12 months of Draw Down (PDF: 114KB)

Pension Increase

NHS pensions are fully index linked to protect them against inflation. 

NHS pensions are reviewed annually and are increased, if appropriate, to keep pace with rises in the cost of living. This indexation is commonly known as Pensions Increase.

Pension Increase is paid from April. It’s based on the rate of inflation in the 12 month period up to the end of September in the previous year.

A member’s pension may not qualify for Pensions Increase straight away. This will depend on the type of retirement.

The Retirement Guide contains more information about Pensions Increase.

Pension commutation

Pension commutation is an option for members with Scheme membership on or after 1 April 2008.

Members can opt to permanently exchange some of their pension for a lump sum, which is normally tax free.

Exchanging pension for a lump sum

The rate of exchange is £12 lump sum for every £1 of annual pension given up.

The amount of lump sum that can be taken is subject to limits set by HM Revenue and Customs (HMRC).The maximum lump sum that can be taken is the lower of:

  • a lump sum of up to 25% of the capital value of the total benefits
  •  25% of the standard Lifetime Allowance

The capital value of a member’s benefits is calculated after any pension commutation has taken place.

The remaining pension must be more than the annual revalued Guaranteed Minimum Pension where applicable. This is the limit set by HMRC.

The pension commutation calculator (Excel: 20.1KB) can help members choose the amount of pension they can exchange for lump sum.

Claiming a bigger lump sum does not affect the level of  benefits payable to a  surviving adult dependent or dependent child.

Find out if you’re eligible

Members of both the1995 and 2008 Sections are eligible to commute pension.

There are some differences to be aware of.

For the 1995 Section, members must have contributed to the Scheme for at least one day on or after 1 April 2008. They will automatically receive a lump sum that is normally tax free but can increase it by exchanging part of their pension.

For the 2008 Section, members do not have entitlement to an automatic lump sum. To receive a lump sum, they will need to exchange part of their pension.

For the 2008 Section Optants, members who elected to move from the 1995 Section to the 2008 Section under the original Choice exercise, receive an automatic lump sum. This is based on their membership up to 31 March 2008.

They have given up some pension in exchange for this. This is known as the mandatory lump sum. It can be increased by exchanging a further part of their annual.

When to apply

The application to exchange part of the pension for a lump sum should be made:

  • at the time of claiming retirement benefits
  • before any pension is put into payment

Members who wish to exchange pension for lump sum who are claiming Actuarially Reduced Early Retirement, will have the amount they are able to exchange based on the value of benefits after actuarial reduction.

Members who retire on ill health grounds can exchange the full value of their benefits, including the enhanced element, subject to the maximum amount payable.

Trivial commutation

Read our factsheet for information about the possibility of a member converting a small pension into a one off lump sum payment.

Trivial commutation factsheet (PDF: 88.4KB)

Guaranteed Minimum Pension (GMP)

Read our factsheets for information about GMP and how we use it.

GMP factsheet (PDF: 194KB)

GMP Test decision tree (PDF: 75.1KB)

Early Payment of Preserved Benefits

Read our factsheets for information about members who wish to claim their deferred benefits before normal pension age.

Early Payment of Preserved Benefits decision tree (PDF: 99.9KB)

Early Payment of Preserved Benefits factsheet (PDF: 257KB)

Actuarially Reduced Early Retirement (ARER)

Read our factsheets for information about members retiring early from the NHS Pension Scheme.

ARER decision tree (PDF: 104KB)

ARER factsheet (PDF: 149KB)

ARER retirement FAQs (PDF: 237KB)

Revised awards

If any changes are made to a member’s pension record after a retirement application has been submitted, a revised award may need to be calculated.

These changes could be due to one or all of the following:

  • pensionable pay (actual and/or notional whole time if part time)
  • the last day of pensionable employment and/or a change to pensionable membership i.e. unpaid sick days
  • pensionable hours worked if part time

Where any amendment needs to be made, an AW171 must be completed and sent to NHS Pensions.

As soon as a change has been identified, an AW171 should be sent so a revised award can be calculated and to avoid any potential for an overpayment.

Use an AW171 form to tell us if there’s a change to the employer pay for 2008 Section members, including Scheme Optants.

Revised retirement benefit details (AW171) (PDF: 302KB)

Allocation

A member may allocate (give up) part of their pension to provide a pension for another person under certain conditions.

The allocated part of the pension will only be paid on the member's death.

The allocated person may be a:

  • spouse
  • civil partner
  • child in certain circumstances
  • qualifying partner
  • someone who is dependent on the member for support

Choosing to allocate will result in a reduction to the member’s retirement pension.

On the member’s death, the allocated person will get both:

  • the allocated pension
  • their adult dependant’s pension from the Scheme

When a member can apply to allocate

A member can apply to allocate:

  • on making a claim for the payment of benefits
  • after making a claim for payment as long as it’s before the date on which the pension is put into payment

If the member is in pensionable employment they can apply:

  • at any time after completing 45 years pensionable membership, if they are not a special class member
  • at any time after reaching age 55 and completing 40 years pensionable membership if they are a special class member
  • at any time after reaching age 65 (60 for special class members)

​​​​​​How to apply for allocation

You can apply by using the AW8/11A application form (PDF: 160KB).

You can apply by using the AW8/11A application form (PDF: 160KB).

Form AW8/11A should then be attached to the retirement application form AW8 or AW8P and sent to NHS Pensions.

We’ll send the member a quote to assist them in deciding whether or not they wish to allocate.

Find out who is eligible

A member who applies to allocate part of their pension must:

  • be in good health for their age
  • have a medical examination at their own expense

The allocated person does not need to be medically examined. 

If the allocated person dies before the member, the decision to allocate cannot be cancelled and the member will not get back the part of the pension they have given up.

Changing or cancelling an application

A member can only cancel or change an application to allocate before we accept the application.  

The amount that can be allocated

A member cannot allocate more than one third of their pension. This is to make sure the pension for the allocated person is at least £260 a year.

The member’s remaining pension must exceed the allocated person’s pension.

The amount of pension the allocated person will receive for each £1 allocated will depend on:

  • the member’s age
  • the allocated person’s age
  • whether the allocated person is male or female

The allocated person’s pension must exceed 1% of the standard Lifetime Allowance.