Flexible retirement: What is it and how can it benefit you?

Flexible retirement is beneficial for both employees and employers – find out how it can improve staff retention, boost wellbeing and more here

CREDIT: This is an edited version of an article that originally appeared on NHS Employers

Flexible retirement is good for a number of reasons. It allows organisations and staff to be flexible about the age at which staff retire, the length of time staff take to retire, as well as the nature and pattern of work in the lead up to final retirement.

Flexible retirement benefits for organisations

• Helps staff to continue working in the NHS for longer, by varying the nature or pattern of work in the lead-up to retirement
• Increases the amount of staff available to cover high demand periods
• Maintains continuity of high-quality care for patients and service users 
• Assists succession planning by retaining valuable skills and experience which can be passed on to other staff
• Retaining valuable staff reduces the time and costs of recruitment and training
• Supports staff financial wellbeing by allowing staff to claim some of their pension benefits and continue working in a more flexible way
• Helps recruit staff who are attracted to the retirement flexibilities and the value of the competitive NHS Pension Scheme
• Makes the NHS a great place to work by prioritising work life balance
• Reduces staff absence by improving staff well-being

Flexible retirement options

Employers should discuss the following retirement flexibilities with staff to reach an agreement about how they will be applied on an individual basis. 

Here are the four flexible retirement options currently available.

Partial retirement (draw down)

• Members over age 55 can take part, or all of, their pension benefits and continue in NHS employment
• Members may continue to build up further benefits in the 2015 Scheme if they wish
• The member’s pensionable pay must be reduced by at least 10 per cent for at least a year, or the member will cease to be eligible for the pension they have drawn down
• Members can draw down on up to two occasions before retiring completely. However, if the benefits are paid before normal pension age, the benefits would be reduced as they are being paid early

Retire and return

• Staff who have reached the minimum pension age may leave NHS employment, claim their pension benefits and later decide to return to NHS employment
• Staff have the option to join the 2015 Scheme on returning to work in the NHS, if they wish

Step down

• Staff may step down to a different role, for example, to reduce the level of responsibility while remaining in NHS employment

Wind down

• Staff can wind down to retirement by remaining in their current post but reducing the number of hours or days they work

Next steps for employers  

Consider how flexible retirement plays a role in your organisation’s policies, strategy and communications to staff.

Communication

• How will you promote flexible retirement options to staff? 
• How can you educate line managers about the benefits of flexible retirement?
• How do you support staff who manage individuals or teams to have retirement planning discussions with their staff?  
• How do you incorporate flexible retirement and retirement planning into ongoing conversations about career progression, development and health and wellbeing?  

Strategy

• How can flexible retirement be used strategically to retain valuable experienced staff and meet workforce priorities? How can you build a workplace culture that embraces flexible retirement and embed it as normal practice?
• How will you evaluate the impact flexible retirement has on your workforce? 

Policy

• Do your existing policies include retirement flexibilities?  
• How do you evaluate and manage requests for flexible retirement?  

We hope this has proved useful in demonstrating the many benefits of flexible retirement. With different options available, there should be an option that proves mutually beneficial for both you and your employee.