For medical and dental professionals in the UK, understanding the importance of strategic retirement planning is essential. The NHS Pension Scheme’s recent introduction of partial retirement options offers a tailored approach to easing into retirement while maintaining your professional commitments. For a comprehensive overview of this flexible benefit and key considerations for high-earning clinicians contemplating their transition, read on.
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This article was approved by Best Practice IFA Group Limited on 31 October 2025.
What Is Partial Retirement?
Partial retirement, often referred to as “drawdown,” enables NHS staff aged 55 or older to access between 20% and 100% of their accrued pension benefits while continuing to work. This innovative scheme allows you to draw part of your pension income, gradually reducing your working hours rather than retiring outright. The flexibility is especially advantageous for high earners seeking to balance financial security with ongoing clinical contributions.
Who Can Access Partial Retirement?
The scheme is available to NHS employees who meet specific criteria:
- Aged 55 or older (with some exceptions for protected minimum pension age)
- Active members of the NHS Pension Scheme
- Agree to reduce pensionable pay by at least 10% for a minimum of 12 months from the start of partial retirement
It’s worth noting that from October 2023, members of the 1995 Section (long-standing scheme members) can now access partial retirement, marking a significant expansion of flexibility for seasoned professionals.
Partial Retirement Benefits
The main advantage of partial retirement is the ability to access 20% to 100% of your pension benefits while continuing clinical work. For high earners, this means you can tailor your retirement transition — drawing income from your pension to supplement your earnings, reducing workload, or gradually stepping back from full-time practice.
You can also continue accruing pension benefits in the 2015 Scheme during partial retirement, allowing your retirement pot to grow even as you draw benefits. This dual approach offers a strategic pathway to a phased retirement, allowing you to align your personal and professional goals.
Understanding the Mechanics and Sequencing
The NHS Pension Scheme comprises three sections: 1995, 2008, and 2015. When accessing benefits under partial retirement, strict sequencing applies:
- Members must first exhaust benefits from the 1995 and 2008 Sections.
- Only then can they access their 2015 Scheme entitlements.
Each section calculates benefits differently. For example, the 1995 Section uses 1/80th of the best of the last three years’ pay, while the 2015 Scheme employs a 1/54th accrual rate. This sequencing ensures scheme integrity and proper benefit distribution.
Critical Considerations and Advice
Decisions regarding partial retirement are complex and often irreversible. Changes in employment arrangements, such as pay reductions and working hours, must be documented formally, and adjustments (like the restriction of overtime) are regulated from April 2024 to prevent circumvention of pay reduction requirements.
Additionally, the McCloud remedy, which addresses age discrimination issues, affects benefit calculations for those with service between 2015 and 2022, adding a layer of complexity to benefit choices during partial retirement.
Tax considerations also play a crucial role. Accessing benefits early can impact your tax position, potentially triggering annual allowance charges or affecting your overall tax planning.
Therefore, engaging an independent financial adviser with expertise in NHS pensions is strongly recommended before making any commitments.
Work with an advisor for the best outcomes
For doctors and dentists in the NHS, partial retirement offers a strategic, flexible pathway to balance professional fulfilment with personal financial planning. However, given the scheme’s complexity and the permanence of some decisions, professional guidance is critical to optimise benefits and safeguard your long-term retirement security.
As the NHS Pension Scheme adapts to modern career patterns, understanding and leveraging its partial retirement options can ensure a smooth, tailored transition into your next chapter. Contact the experts at Dental & Medical Financial Services to ensure your retirement plan sets you up for the financial future you’re aiming for.
