Educational, not advice. This article explains how partial retirement works in the NHS Pension Scheme. Pension Plain is not authorised or regulated by the Financial Conduct Authority. Nothing here is a recommendation about whether to take your pension, when to take it, or how much of it to take. If you want a personal recommendation, speak to a qualified FCA-authorised financial adviser, or use the free MoneyHelper service.
Scope: This covers partial retirement in the NHS Pension Scheme for England and Wales: who is eligible, the pay reduction you have to accept, how much pension you can take, when your pension can be stopped again, and how the McCloud remedy affects the decision. It does not cover full retirement, ill health retirement, or the NHS schemes in Scotland and Northern Ireland, which are administered separately under their own regulations.
In short
- Partial retirement lets you take between 20% and 100% of your NHS pension while staying in your job and continuing to build further pension in the 2015 Scheme.
- The condition most people do not expect: you must reduce your pensionable pay by at least 10% and keep it down for at least 12 months.
- If your pay goes back above 90% of its old level within that year, the pension you are being paid is stopped. The scheme calls this abatement.
- You do not need a 24-hour break in employment. That is what full retirement requires, and it is the single most common misunderstanding about this.
- You can do it twice, not more, before fully retiring.
- 1995 Section members have only been able to do this since 1 October 2023. Before that it was open to 2008 Section and 2015 Scheme members only.
- Take it before your normal pension age and the benefits you draw are reduced, permanently. Normal pension age is 60 in the 1995 Section, 65 in the 2008 Section, and your State Pension age or 65, whichever is later, in the 2015 Scheme.
- If the McCloud remedy affects you, you will be asked to make your remedy choice in the 12 months after you partially retire, and the percentage you draw can affect that choice.
A lot of NHS staff reach their late fifties wanting the same thing: less work, without a cliff edge. Fewer shifts, less responsibility, some pension coming in, but not the full stop of handing back the badge.
The scheme has a mechanism for exactly that. It’s called partial retirement, sometimes drawdown, and since October 2023 it’s been open to far more members than it used to be. It is also more conditional than most people realise, and the conditions are where the decisions actually live.
What partial retirement actually is
NHS Pensions puts it plainly:
If you’re aged 55 and over and you have agreement from your employer, you can choose to take part, or all of your pension benefits while you continue working in NHS employment and build your pension benefits in the 2015 Scheme.
NHSBSA, Partial retirement
Three things in that sentence matter. You keep your job. You keep building pension, in the 2015 Scheme, whichever part of the scheme your existing benefits sit in. And your employer has to agree, which makes this a conversation with HR before it’s anything else.
What you draw is paid as a monthly pension, not a lump sum arrangement, and you choose how much of it to take:
You can take a minimum of 20% and up to a maximum of 100% of your pension benefits in one or two drawdown payments, without having to leave your current job.
NHSBSA, Partial retirement
The 10% rule, which is the real gate
Here’s the part that surprises people. You can’t simply draw your pension and carry on exactly as you were. You have to take a pay cut.
If you wish to take partial retirement, you need to agree a new working arrangement with your HR department that lets you reduce your pensionable pay by at least 10%. For example, you could change your level of responsibility, work fewer hours, or move to a new role.
NHS Pensions, Partial Retirement member factsheet (V7)
The detail underneath that matters as much as the headline:
- The 10% is measured against your pensionable pay for the 12 months before you take partial retirement.
- Your pay has to stay at the reduced level for at least 12 months afterwards.
- Your terms and conditions have to change to reflect it. The rest of your terms stay as they are.
- You must reasonably expect the new level to last at least those 12 months.
- For GPs, dental practitioners, ophthalmic practitioners and non-GP providers, it is a 10% reduction in commitment rather than in pay.
One useful piece of reassurance in the factsheet, because it is the obvious worry: a national pay award does not undo your reduction. In the scheme’s words, “Pay awards such as the annual Agenda for Change pay award, do not alter your 10% reduction in pensionable pay.” You won’t be caught out by a pay round you had no say in.
You can also still do additional work that isn’t pensionable, such as bank or overtime, during that 12 months. It’s pensionable pay that has to come down, not your total earnings.
Abatement: when your pension stops again
This is the consequence of the 10% rule, and it’s the thing most worth understanding before you commit.
If your pay climbs back up within that first year, whether by taking a better-paid job, increasing your hours, or increasing your commitments, the pension you have started drawing is switched off.
If this causes your pay to increase to more than 90% of your pensionable pay before you took partial retirement, the pension benefits you’re receiving will be stopped (abated).
NHS Pensions, Partial Retirement member factsheet (V7)
It restarts only when your pay comes back down to 90% or less of the old level. And the responsibility for telling the scheme sits with you: the factsheet asks members to report any contractual change that pushes pay back over the line, specifically to avoid building up an overpayment you will then have to repay.
The practical read is that partial retirement is a commitment for a year, not a switch you can flip back. If there’s a realistic chance you’ll want to step back up inside twelve months, that’s a reason to look hard at the timing.
You do not need a 24-hour break
If you have worked in the NHS for any length of time, you’ll have heard about the 24-hour break: retire, take a day out of contract, come back on new terms.
That is full retirement. It is not this.
Fully retiring means taking a 24-hour break in your contract of employment. You are not required to have a break in employment of 24-hours to claim your partial retirement benefits.
NHS Pensions, Partial Retirement member factsheet (V7)
Your employment continues unbroken. That also protects your continuous service, which matters for a range of employment rights that have nothing to do with your pension.
Twice, and no more
Partial retirement can be used on up to two occasions before you fully retire. One of the eligibility conditions is stated as not having “already claimed partial retirement on two occasions”.
There’s a trap for longer-serving members. If you already took partial retirement from the 2008 Section before you moved into the 2015 Scheme, that one counts. You have a single occasion left, not two.
And the 10% pay reduction applies again on the second occasion. It isn’t a hurdle you clear once and forget.
What changed on 1 October 2023
Two things, and they are the reason this is worth revisiting even if you looked at it before.
1995 Section members were let in. Partial retirement had been available to 2008 Section and 2015 Scheme members only. From 1 October 2023 the regulations changed so that members with 1995 Section benefits can take it too. That is the largest group of long-serving NHS staff, and for them this option simply didn’t exist before.
The ceiling went up. From the same date, members can claim “up to 100% of your pension benefits from any Section or Scheme”. Previously the proportion you could draw was more restricted.
Taking it early still costs you
Partial retirement does not change the arithmetic of taking benefits before your normal pension age. If you draw early, what you draw is reduced, and the reduction is permanent.
Your normal pension age depends on which part of the scheme the benefits sit in:
- 1995 Section: 60
- 2008 Section: 65
- 2015 Scheme: your State Pension age, or 65, whichever is later
Most members have benefits in more than one of those, which is why a single figure for “your reduction” does not exist. The size of the reduction depends on your own service, your own dates and how far ahead of each normal pension age you are drawing. Your annual benefit statement and the scheme’s own partial retirement calculator are the places that produce a number for your case.
The minimum age, and the members who can go at 50
The minimum pension age is 55 for most members. Some 1995 Section members, generally those who joined the scheme before 6 April 2006, have a protected minimum pension age of 50.
If that’s you, there’s a condition attached that comes from tax law rather than from the scheme: you must take 100% of your 1995 Section benefits. The factsheet is explicit that this is HMRC legislation the scheme is required to comply with, not a scheme policy choice. The partial part of partial retirement is not available to you on those benefits.
You have to still be paying in
Partial retirement is only open to active members. If you have opted out of the scheme, you are not eligible to claim under these rules, and you must remain an active member for at least one day after taking it.
There’s a warning worth repeating for anyone thinking of opting out afterwards to increase take-home pay. Doing so ends your entitlement to ill health retirement benefits and death in service benefits, both of which you hold as an active member. Those protections are easy to forget because they only matter when something has gone wrong.
Members with maximum service
Maximum pensionable membership is 45 years in the 1995 and 2008 Sections, and 40 years at age 55 rising to 45 thereafter for Special Class members.
The rules then split, and the split is not intuitive:
- 1995 Section members who have reached maximum membership and stopped paying contributions cannot use partial retirement for those benefits. To draw them and keep working, they have to retire and rejoin the 2015 Scheme.
- 2008 Section members in the same position can use partial retirement, because the scheme regulations already provided for it.
If McCloud affects you
Members caught by the McCloud remedy had their service for the remedy period, 1 April 2015 to 31 March 2022, moved back into the 1995 or 2008 Section on 1 October 2023. At some point they have to choose which set of benefits to keep for that period.
Partial retirement triggers that choice:
If this affects you and you take partial retirement, you’ll be contacted in the 12 months after you’ve partially retired and asked to choose between keeping these benefits in the 1995/2008 Section or taking 2015 Scheme benefits for the remedy period instead.
NHS Pensions, Partial Retirement member factsheet (V7)
The awkward part is that the two decisions interact. The scheme notes that the percentage of pension you choose to draw can affect your tax position and your final salary link if you have one, and that if you later choose 2015 Scheme benefits for the remedy period, “you may have overpayments to pay back”.
So the order of events isn’t ideal: you pick a percentage first, and make the remedy choice afterwards, with the first decision able to influence the second. The scheme has published a McCloud Percentage Tool as an interim aid for members in this position. Our guide to the McCloud remedy covers the choice itself in more detail.
How you apply
The process is the ordinary retirement application plus one extra form. The factsheet describes it as the same application as when applying to retire, with the addition of a short supplementary form.
In practice the sequence is: agree the reduced working arrangement with HR first, get the terms and conditions changed, then apply. The pension application is the last step, not the first, because eligibility depends on the employment change having been agreed.
FAQ
Do I have to take a 24-hour break to partially retire?
No. The 24-hour break is what full retirement requires. NHS Pensions states directly that you are not required to have a 24-hour break in employment to claim partial retirement benefits. Your employment carries on without interruption.
How much of my pension can I take?
Between 20% and 100%, in one or two drawdown payments. Members with a protected minimum pension age of 50 who are drawing 1995 Section benefits are the exception: they must take 100% of those benefits, because of HMRC rules the scheme has to follow.
Do I really have to take a pay cut?
Yes. You have to agree a new working arrangement that reduces your pensionable pay by at least 10% against your pensionable pay for the previous 12 months, and it has to stay reduced for at least 12 months. Your terms and conditions have to change to reflect it. For practitioners it is a 10% reduction in commitment rather than pay.
What happens if I take on more work and my pay goes back up?
If your pay rises above 90% of what it was before you partially retired, the pension you are drawing is stopped, which the scheme calls abatement. It starts again only once your pay falls back to 90% or below. You are asked to tell NHS Pensions about any contractual change that takes you over the line, so that you do not build up an overpayment you have to repay.
Does a national pay award break the 10% reduction?
No. The factsheet says pay awards such as the annual Agenda for Change award do not alter your 10% reduction in pensionable pay.
Can I do this more than once?
On up to two occasions before fully retiring. If you already took partial retirement from the 2008 Section before joining the 2015 Scheme, that counts as one of them and you have one occasion left. The 10% pay reduction requirement applies again each time.
I am in the 1995 Section. Is this open to me?
Yes, since 1 October 2023. Before that date partial retirement was available only to members with 2008 Section or 2015 Scheme benefits. One exception remains: if you have reached maximum membership in the 1995 Section and stopped paying contributions, you cannot use partial retirement for those benefits and would need to retire and rejoin the 2015 Scheme instead.
Will my pension be reduced for taking it early?
If you draw benefits before the normal pension age for the part of the scheme they sit in, yes, and permanently. Normal pension age is 60 in the 1995 Section, 65 in the 2008 Section, and your State Pension age or 65 (whichever is later) in the 2015 Scheme. The size of the reduction depends on your own service and dates, so the scheme’s partial retirement calculator is the place to get a figure for your case.
Do I keep building pension after partially retiring?
Yes, in the 2015 Scheme, provided you remain an active member paying contributions. You must stay an active member for at least one day after taking partial retirement.
How does McCloud affect the decision?
If the remedy affects you, taking partial retirement triggers your remedy choice: you will be contacted within the following 12 months and asked whether to keep the remedy-period benefits in the 1995 or 2008 Section or take 2015 Scheme benefits instead. The percentage you chose to draw can affect your tax position and your final salary link, and if you later opt for 2015 Scheme benefits for that period you may have overpayments to repay.
Pension Plain’s take
Partial retirement is a good deal wrapped in an off-putting condition, and most of the confusion around it comes from people meeting the condition first.
The 10% pay cut sounds like a penalty. It is really the definition: the scheme is paying you a pension because you have genuinely stepped back, and the reduction is how it proves you have. Once you read it that way, the abatement rule stops looking punitive and starts looking like the same sentence written twice.
What deserves more attention than it gets is the sequencing problem for anyone caught by McCloud. You choose a percentage, and then, up to a year later, you make a remedy choice that the percentage has already influenced. That is a hard thing to optimise, and it’s the one part of this where getting a proper personalised projection before you commit is worth the effort.
The other thing worth saying: this option is genuinely newer than it feels. For 1995 Section members it has only existed since October 2023. If you looked into taking your NHS pension while working before then and concluded you couldn’t, the answer may simply have changed.
Information, not advice. This article explains the NHS Pension Scheme partial retirement rules for England and Wales as at 31 July 2026, drawn from NHS Pensions’ own published guidance. It is general information and not a personal recommendation. Pension Plain is not authorised or regulated by the Financial Conduct Authority. Your own eligibility, reduction and figures depend on your service history, your section of the scheme and your employer’s agreement, so NHS Pensions and your employer are the authorities on your case.
Key official sources
- NHSBSA, Partial retirement, the scheme’s member hub page, including the 20% to 100% range and the partial retirement calculator.
- NHS Pensions, Partial Retirement member factsheet (V7, 21 December 2023), the authority for the 10% pay reduction, the eligibility conditions, abatement, the two-occasion limit and the McCloud interaction.
- NHSBSA, Changes to public service pensions, the scheme’s McCloud remedy hub, including the McCloud Percentage Tool.
- NHSBSA, Re-employment, for members who retire and return rather than partially retire.