Partial Retirement

Partial retirement is a flexible option that enables NHS Pension Scheme members to continue working while receiving some or all of their pension benefits. Members can apply for partial retirement twice and after that they will need to fully retire to access their remaining pension.

Key Points:

• From 1 October 2023, changes to partial retirement will also include any 1995 Section benefits you have. An estimate calculator will be available later this year on our website and we recommend waiting until this is available before you apply.  
• For most members, the minimum retirement age is 55, when you can take between 20% to 100% of your pension, without leaving your current job.
• Some 1995 members with a protected minimum retirement age can take partial retirement from age 50. From age 50 to 55, you will need to take 100% of your pension benefits.
• You don’t need to take a break or change jobs to take partial retirement. You can carry on working, but you need to reduce your pensionable pay by at least 10% for the first 12 months.
• If you’re considering partial retirement the first step is to speak with your employer about your options.

What happens to the rest of my pension?

If you decide to withdraw less than 100% of your pension, the remaining amount will be left in your pension pot. You can then continue to pay in and you will be able to access the rest of your pension when you fully retire.

All pension scheme members are eligible. Members of the 1995 section with a protected minimum pension age can apply from age 50, while other members can apply from age 55.

Eligible members who apply from age 50 should be aware they will need to take 100% of their pension if they retire before they are 55.

You need to reduce your actual pensionable pay by at least 10% for the first 12 months from your partial retirement. You must have a change to your terms and conditions of employment to be eligible to partially retire. This change in terms and conditions is to reference how you’ve reduced your pensionable pay by 10%.

For example, this could be reducing your hours, taking on a new role, or reducing your level of responsibility. This means you’ll need to agree a new working arrangement with your employer before you can apply for partial retirement.

What if I partially retire before my ‘normal’ pension age?

Your pension benefits will be reduced if you retire before your normal pension age, as you will be taking them early. How much they reduce depends on how much earlier you retire, however, the reduction is approximately five percent for every year the pension is taken early.

Your ‘normal’ pension age depends on which section of the pension scheme you are in.

How can I work out what my pension will be if I partially retire?

In early 2024, you’ll be able to find a partial retirement calculator on our website. 

We recommend waiting until this calculator is available before you apply to retire. It will allow you to work out the amount of pension you want to take and what new working arrangement will be best for you. 

If you want to apply to take partial retirement before the calculator is available, we’ll do all we can to process your applications within the usual time. We’ll also make it possible for applications to be backdated to your chosen retirement date.

How do I apply for partial retirement

Essentially the process is very similar to retiring fully. The main steps are:

1. Check you are eligible for partial retirement on this page.
2. Contact your HR team to discuss your intention to apply for partial retirement. This step is essential as you need to ensure that your employer can support a new working arrangement which will allow you to reduce your pensionable pay by at least 10%.
3. You should apply to the SPPA three to four months before you want to start taking benefits from the scheme. Your employer will provide your application form (as they have a section to complete too)
4. Your employer will submit the form to the SPPA once complete and you’ll receive a notification once it has been processed and your first payment date has been set.
5. Begin your new working arrangements with your pension paid monthly by the SPPA.

You may wish to seek guidance from a financial advisor before you begin the partial retirement process. It’s also important to consider the tax implications as pension is classed as income and so is taxed.