Hear from Madeleine Dowling (pension expert) and Greg Hendricks (GP Specialist Financial Adviser) as they discuss the impact reducing your working hours could have on your NHS pension.
Your question:
"I am a 55-year-old practice manager with 1995 and 2015 NHS pension scheme membership. I have worked full-time for the NHS for 35 years. I intend to retire at 65, but I’m hoping to reduce my hours for the next 10 years. How will this affect my pension?”
Our experts' answer:
If you go part-time for the final 10 years of employment, it is really important to try and keep your hourly pay rate the same. This is because your pension calculation in the 1995 NHS pension scheme is based on the best of your final three years. So, if you retire in March 2033, your pension will be calculated based on your salary between March 2030/31, March 2031/32 and March 2032/33.
If practice managers in the 1995 scheme reduce their hourly rate in or before this period, it can be quite punishing on their pension.
If you do want to cut your hours, then the best way of doing this without affecting your hourly rate is to ensure you don’t lower your level of responsibility. For example, you could do a job share for a practice manager role instead of taking a less senior role.
The best of the last three years’ calculation will be converted into a full-time equivalent to calculate your pension, so if your hourly rate remains the same and you only reduce the number of hours you’re doing, then your pension should not be affected by the change.
Thinking about getting specialist advice?
If you're looking for guidance on your NHS Pension or help with your retirement planning, you can speak to a Specialist Financial Adviser from Wesleyan Financial Services.