Doctors who are members of the 1995 Section of the NHS Pension Scheme can access their full pension benefits from the age of 60. In order to do so it is necessary to retire from all NHS employments; however, this does not have to be for good. In fact, a member of the 1995 Section of the scheme is only obliged to take a 24 hour break before returning to NHS employment.
Some restrictions apply on return to work with a calendar month. Doctors who return to work after a break of 24 hours must not work for more than 16 hours per week during the first calendar month. If NHS employment exceeds 16 hours in any week during the first calendar month, the pension will be suspended. After one calendar month there is no further restriction on the number of hours that can be worked.
So why would a doctor want to take 24 hour retirement? This will depend on personal circumstances. Possible reasons for wanting to access pension benefits while continuing work might include using the lump sum to pay off a mortgage, to gift to children or to meet other large capital expenses. The extra income could also allow some flexibility to make lifestyle changes in the lead up to retirement.
Taking 24 hour retirement before normal retirement age would ‘crystallise’ pension benefits under the NHS Pension Scheme at a reduced rate. For a few individuals this might be desirable to limit exposure to potential Lifetime Allowance charges; however, this should be discussed in detail with an adviser first to assess whether it would be financially advantageous in the long run.
In terms of implementation, doctors should make sure they discuss their plans with their employer(s) to ensure they can return to work after 24 hours and limit their contractual hours to 16 hours per week during the first calendar month. GPs would need to agree their plans with both their partners and NHS England or Primary Care Organisation.
As it is a big financial decision, it should also be discussed with a financial adviser with a specialist understanding of the NHS Pension Scheme. If you are interested in 24 hour retirement we are happy to help; please call Richard Higgs on 0117 966 5699 or email email@example.com.