From 1 October 2023, the Department of Health and Social Care (DHSC) is introducing changes to make it simpler to take partial retirement, meaning you can claim your pension and work in a more flexible way without having to leave your job.
Taking part of your pension benefits is also sometimes known as ‘draw down’.
This is already possible for pension benefits you’ve earned in the 2008 Section or 2015 Scheme from 1 October 2023, it 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.
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. From age 55, you’ll be able take between 20% and 100% of your benefits in one or two payments, without having to leave work.
You’ll be able to continue building your pension in the 2015 Scheme. You won’t need to take a break or change jobs. You can carry on working if you want. You just need to reduce your pensionable pay by 10%. GPs, non-GP providers, and dental practitioners need to reduce their NHS commitments by 10%.
Why the changes are being made
Under the current 1995 Regulations, members are currently unable to partially retire, or to take some of their pension benefits whilst continuing to work and build further pension.
From 1 October 2023 the DHSC is changing the 1995 Section regulations to allow members to partially retire and claim up to 100% of their 1995 Section benefits whilst continuing to work and build up further pension in the 2015 Scheme.
Under the current 2008 Section and 2015 Scheme regulations, members can only claim a maximum of 80% of their benefits.
To make sure the rules for partial retirement are the same for all members, the DHSC is also changing the 2008 Section and 2015 Scheme regulations to allow up to 100% drawdown, instead of a maximum of 80%.
Increased availability of partial retirement may better support members’ work/life balance and help retain valued experienced staff in the workforce. Members affected by pension tax may also consider partially retiring and remaining in work, rather than opting out of the NHS Pension Scheme or leaving the NHS completely.
Suspension of abatement following partial retirement
Under the rules for the 2008 Section and 2015 Scheme, members who choose to partially retire (reducing their pensionable pay by at least the required 10%) but whose terms of employment change again within 12 months so that their pensionable pay is more than 90% of what it was before they took partial retirement, will be subject to abatement or a reduction of their pension benefits.
Drawdown abatement for members of the 2008 Section and 2015 Scheme is currently suspended until 31 March 2023 through the retire and return easements and will resume on 1 April 2023.
For consistency with the 2008 Section and 2015 Scheme regulations, the DHSC is amending the rules governing partial retirement in the 1995 Section to be the same.
Read more about the suspension of abatement COVID-19 guidance on support for retired members.
Abatement following partial retirement and additional pension
The DHSC has noticed an error in the 2015 Scheme regulations around abatement following partial retirement from that scheme where members hold additional pension.
Under the 2008 Section regulations, if members who partially retire are affected by abatement, then their additional pension continues in payment. In the 2015 Scheme regulations the additional pension is also subject to abatement.
The DHSC will be amending the 2015 Scheme regulations so that additional pension will not be subject to abatement following partial retirement.
To date, no members who have partially retired from the 2015 Scheme have been subject to abatement in respect of their additional pension.
When you'll be able to apply
The DHSC recently published the outcome of its consultation on the changes NHS Pension Scheme changes to scheme regulations consultation response (GOV.UK)
To make sure members who are close to retirement age had a chance to consider the changes before finalising their retirement plans, the DHSC asked that we send letters to those closest to their normal retirement age from mid-January 2023, ahead of the consultation closing. This has now been completed.
We are currently sending letters to all remaining active members and will then be writing to deferred members. We expect to have sent all letters by the end of June 2023.
You can view a copy of the letter that is being sent to all members.
Now the consultation response has been issued we’re updating our guidance. We’re aiming to share updates and information on partial retirement and how you’ll be able to apply by early summer ahead of implementation from 1 October 2023.
