What is NHS partial retirement?

In October 2023 a partial retirement option became available to members of the NHS pension scheme to support them to work more flexibly up to and beyond retirement age.

This option enables those who wish to partially retire to claim all or part of their pension whilst continuing to work and build more pension benefits.

Partial retirement allows a member of the NHS pension scheme to drawdown between 20% and 100% of their pension benefits without having to leave employment, but they will have a reduction in pensionable pay by at least 10% for 12 months.

What is the difference between NHS partial retirement and NHS retire and return?

NHS partial retirement is different to NHS retire and return.

Retire and return requires a member of the NHS pension scheme to have a break (of at least 24 hours) in service between retiring and returning to work.

Partial retirement does not require a member of the NHS pension scheme to have a break of employment for any length of time.

Full details of retire and return options are detailed in guidance from NHS England, NHS Employers and the NHS Pension Business Services Authority (for members in England and Wales) and the SPPA website (for members in Scotland). HSC Pension Service in Northern Ireland has information about their scheme.

What does the NHS terms and conditions handbook state about partial retirement and contractual redundancy?

Contractual redundancy pay is an enhanced redundancy package that an employee receives if their employment contract states they are entitled to more than the minimum statutory redundancy pay.

Section 16 of the NHS Terms and Conditions of Service handbook sets out the rules relating to contractual redundancy for NHS employees.

NHS contractual redundancy calculations are based on reckonable service.

Section 16.6 of the handbook states that employment that has been taken into account for NHS pension benefits will not count as reckonable service for the purposes of redundancy.

This means the calculation for a contractual redundancy payment for members of the NHS pension scheme that have partially retired will be only based on NHS service built up after they have taken partial retirement.

For more information, view the full handbook.

What about NHS partial retirement and statutory redundancy payments?

Statutory redundancy pay is a payment you should receive from your employer if you have worked for them for two years or more and are made redundant.

Statutory redundancy pay depends on age and length of service, weekly pay is capped, and there's a maximum statutory redundancy payment you can receive.

Statutory redundancy payments should not be affected by partial retirement. You can calculate your statutory redundancy pay on the gov.uk website.

Can the rules regarding NHS contractual redundancy and partial retirement be changed?

The NHS Staff Council is responsible for the NHS Terms and Conditions of Service handbook where the rules around redundancy and partial retirement are outlined.

The NHS Staff Council must have a mandate from the Department of Health and Social Care (DHSC) before it can negotiate any changes to this.

The DHSC is not required to give the NHS Staff Council a mandate just because this is requested.

Any changes to the NHS terms and conditions of service handbook may take time to enact and may not have a retrospective effect.

What has the RCN done to get the NHS partial retirement rules reviewed?

The RCN and other unions who are part of the NHS Staff Council have raised the impact of partial retirement on redundancy payments in national discussions and with NHS stakeholders and have requested a review of this section of the NHS Terms and Conditions of Service handbook.

What is the RCN position on NHS partial retirement and redundancy?

The RCN believes that RCN members working in the NHS should not suffer a detriment in respect of their contractual redundancy entitlement because they have partially retired.

The RCN will continue to raise this issue at national level and lobby for the DHSC to provide a mandate to review this section of the handbook.

Individual position

The RCN is not regulated to provide financial advice and members are strongly encouraged to seek qualified and independent financial advice before making any decisions regarding their retirement and pension plans.

More information about the NHS pension scheme can be found in our advice guide.

Members of the RCN are entitled to a complimentary, no obligation financial review from Quilter Financial Advisers.

If RCN members are considering taking partial retirement, and should they subsequently be made redundant, any future contractual redundancy payment will only be based on NHS reckonable service after partial retirement.

If RCN members have already taken partial retirement and are considering taking voluntary redundancy, they should base their decision on the offer made to them by their employer and seek appropriate advice.

If RCN members believe their employer has inappropriately offered, administered, or is administering, partial retirement, they should seek individual advice by contacting RCN Direct.

*For the purposes of this document references to the NHS Pension Scheme include the Northern Ireland Health and Social Care (HSC) Pension Scheme, unless otherwise specified