As discussed in a previous article the NHS pension scheme is changing their partial retirement options available. As always with the NHS pension scheme, the devil is in the details as some pension members are finding they are not eligible to benefit from partial retirement.
Changes already in place
April 1st 2023: Members with benefits in the 1995 NHS pension section can retire, take their benefits and return to work and build up further retirement benefits in the 2015 NHS pension scheme.
October 1st 2023: Flexibility will further improve when members of the 1995 NHS pension section will be able to take some or all of their pension benefits without having to leave their current job, thus avoiding having to change their contract.
These options are already available to members of the 2008 and 2015 NHS pension sections.
This all sounds good and hopefully now familiar, so what’s the catch?
Read the small print
However, once again, a single, easy-to-miss line in NHSPS documentation could have disproportionate implications for some. It states that ‘only active members of the NHSPS can avail themselves of these flexibilities’.
So, for instance, anyone who has opted out of the NHS pension scheme due to issues with the annual allowance or lifetime allowance would be unable to use flexible retirement until they have opted back in.
While opted out, those pension members would have benefited from the inflation-linked uplift. With inflation at a 40-year high, opted-out members have seen uplifts as great as 10% this last year. Opting back in could see the loss of this, which could be punitive.
Worse still… if you have opted out and have since become ill and are currently away from work, receiving sick pay, you cannot opt back in until you are back to work, delaying the option further.
For those who are “decoupled” it becomes more problematic. The decoupling in this scenario means you have not been an active member of the pension scheme for in excess of five years. If you have decoupled, you would not be eligible for partial retirement.
There is a chink of hope…
There is a ‘contingent decisions protocol’ which may allow a person to reverse past decisions, such as leaving one section of the NHS pension scheme for another, or opting out if they can prove that given the knowledge and options they have now, they would have historically made a different decision. This does sound a bit too much like a golden ‘get out of jail card’ for many past decisions that may not come to fruition.
I’m afraid this is another case of ‘watch this space’ as these changes are finalised by October 1st 2023.
I promise you this is not a fever dream. I recommend keeping in touch with Legal & Medical to ensure you are up-to-date with the latest developments. We are always here and ready to chat if you feel the need.
Have you thinking of taking partial retirement? Let us know by adding a comment below.
This article is not specific advice. We would always suggest that you get specialist advice in this area.
Hello!. Thanks for the article.
I’ve been a continuous member. So in theory can I take my 1995 years aged 50 after I hit the top of the consultant pay scale? I know there will be an actuarial reduction however would this be counteracted by the fact that any pension is increased by CPI every year, way above any likely pay rises.
In the meantime could I carry on on contract and paying into 2015 scheme? Would partial retirement at 50 be a dream or a reality with these new changes?
Hi there,
If you joined the 1995 Section before 6 April 2006, you can choose to take early retirement from age 50. If you joined the 1995 Section on or after 6 April 2006, your minimum pension age is 55 unless you have a protected minimum pension age. In terms of “counteraction” – yes, your pension will be inflated every year. However, you are still starting from a significantly lower base pension than if you took benefits at 55, for instance, or NRA (Normal retirement age) for the 1995 scheme, which is 60 as you are obviously aware. So inflation doesn’t necessarily counteract the initial drop in pension you receive upon early retirement, but it maintains your pension’s value in an inflationary environment.
Best wishes, Owen