When it came to my turn as to a blog subject, I pondered what to write about. In the end I decided to focus on one of the areas that we are getting the most queries about and that is foremost of many NHS workers minds at the moment. Partial or Flexible Retirement.
Before October 2023 the only way to access your 1995 pension was to either retire completely, or retire and return, which means having to leave and then coming back on a completely new contract, with many trusts limiting these new contracts to 12 or 24 months (this option is still available). This meant that many experienced professionals were leaving the NHS to access their pension as this seemed the preferable option!
More and more people are looking for a way to wind down into retirement. This is a move away from the days where you retire on a Friday and never work again, although clearly for some this is still the right option. Retirement is a huge transition and being financially prepared is one of the key aspects you can control. The Flexible Retirement option allows the NHS to retain experienced staff within the workforce while offering you greater flexibility for when looking to wind down.
From October 2023 those in the NHS pension now have the flexibility to partially retire (subject to agreement by your HR team). This means that you continue on the same contract. You must reduce your pensionable pay by 10% for at least the first 12 months and this will allow you to access between 20% and 100% of your 1995 benefits. You can then continue to build up benefits in the 2015 scheme whilst you are still working, something which again you couldn’t do previously.
Many find they are better off each month with their pension and salary, working less than when they worked full time. The key is working out which aspects of your finances will ‘kick in’ at what points and are they sufficient for your needs, something we can help you with if needed.
If you are past the Normal Pension Age for the 1995 scheme (normally age 60 but could be 55 if you have Special Class Status) your pension in the 1995 scheme is now only going to increase if you have a pay rise, no more years will be added. Any pension that you ‘could’ have claimed at the normal retirement age but haven’t, wont be backdated and so essentially you could be missing out on pension you could be receiving.
Unfortunately we are seeing far too many of these cases, as people are just unaware of their options and are potentially missing out on pension income they could be receiving, so if you are past the normal retirement age it is essential you get advice around your circumstances.
Here at Circle we specialise in financial advice for NHS professionals so please do not hesitate to get in touch if you feel we can help.
Author: Kirstin D’Cruze – NHS Pension Specialist IFA.