NHS pensioners rush to use retire-and-return scheme – how it works

NHS staff are choosing to return to work while still receiving their pension under a scheme to retain experienced workers that has seen take-up triple in just four years, according to new figures.

The dramatic shift in pension taking and retirement behaviour among NHS staff is revealed in Freedom of information (FOI) data obtained by wealth manager Quilter from the NHS Business Services Authority.

So-called ‘retire-and-return’ cases have soared by more than 300% in four years, rising from 4,697 in 2020/21 to 18,725 in 2023/24 – the highest on record – showing the success of the scheme to encourage senior NHS staff who want to retire early not to leave the profession.

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This spike coincides with an April 2023 rule change, which for the first time allowed members of the health service pension scheme 1995 Section to retire, take their pension, and rejoin the NHS workforce and pension scheme (2015 Section) after a 24-hour break, allowing them to boost their pension while drawing from it.

The reform also permanently removed the 16-hour work limit, a restriction temporarily lifted during the pandemic. Up to 1 April 2023, 1995 Section rules limited members to working 16 hours a week in the first month after retirement to avoid their pension payments being affected.

Provisional figures for take up of the retire-and-return scheme for 2024/25 show a dip to 12,597, but the overall trend remains sharply upward. Year-on-year growth peaked at +106% in 2023/24, showing the immediate impact of the rule change.

Graham Crossley, NHS pensions specialist at Quilter, said: “This data shows just how much appetite there is for flexibility among NHS staff. Retire-and-return and partial retirement are proving vital for retaining experienced clinicians and nurses, but they also add complexity.

“Without proper guidance, staff risk making decisions that could affect their long-term financial security. Anyone considering these options should seek expert advice to avoid unintended consequences.”

Separate FOI data from last year revealed more than 209,000 NHS pension scheme members may be missing out on monthly payments from the 1995 Section. Despite reaching normal pension age, many have not claimed their benefits – 143,632 are aged 60 or over, and 65,921 are 55 or older. The nature of the 1995 Section means delaying a claim typically results in lost payments.

We look at how to find lost pensions in a separate article.

Who is using the NHS retire-and-return scheme?

Nurses and a group of NHS staff known collectively as ‘officers’ dominate retire-and-return, accounting for over 90% of cases. In 2023/24 alone the figures show take up of the scheme from:

• Special and non-special class nurses: 8,936 cases (48% of the total)
• Officers: 8,925 cases
• Hospital doctors: 664 cases

Officers are typically staff in administrative and managerial roles – such as finance, HR, operational managers – as well as allied health professionals, like physiotherapists and radiographers, and other non-medical, non-nursing clinical roles.

By age, 60 to 64 year olds make up nearly half (47%) of all retire-and-return cases, with 55 to 59 year olds contributing 36%.

Partial retirement

NHS staff have also increasingly been taking partial retirement since October 2023, when the option was made available to the 1995 Section of the NHS pension.

This route allows staff to draw 20% to 100% of their pension while continuing to work – and without having to take a break in between working or needing to leave like with retire-and-return – provided they reduce pensionable pay by 10%. The FOI showed:

• 30,903 partial retirements recorded by Q3 2025
• Uptake more than quadrupled in a year, from 2,716 in Q4 2023 to 12,785 across Q2 and Q3 2025 combined
• Over half (53%) of partial retirees are aged 60 to 64, while 35% are 55 to 59

By comparison, redundancy-related pension awards remain rare, with just 154 cases in 2023/24.

“These figures underline the impact of deliberate policy reforms aimed at tackling workforce shortages. Before 2020, NHS pension rules were rigid: members of the 1995 Section who retired could not rejoin the scheme, and partial retirement was unavailable to them,” said Crossley.

“Temporary Covid-19 easements in 2020 paved the way for permanent changes in 2023, creating a new era of retirement flexibility.”

How the NHS retire-and-return scheme works

The NHS retire-and-return scheme works by allowing health service staff to retire, take their full pension, then return to work after a short break – typically 24 hours – and rejoin the NHS pension scheme to keep building future pension benefits.

Those who decide to re-join the NHS can work as many hours as they wish without having their pension payments reduced or stopped.

You can re-join the NHS pension scheme even if you have 45 years of service in the 1995 or 2008 Section, as long as you’re under the age of 75.

Individuals considering retire-and-return should discuss with their line manager the terms on which they will be able to return following retirement. It may not be possible to return to the same role, which may affect your decision.

With partial retirement you can claim your pension, while continuing to work, but without having to take a break and leave your job. You can continue building your pension in the 2015 Scheme.

You will need to work with your employer to adjust your hours or reshape your contract so your “pensionable pay” is reduced by 10% for the first year (or your pensionable commitment by 10% if you’re a Practitioner).