3,000 NHS staff a year apply to get their pensions early due to illness

Thousands of NHS staff each year are applying to retire early due to ill health, new figures show. Over 3,000 workers – which will include doctors, nurses and other non-clinical staff – applied to take ill health retirement last year, which allows them to take their pensions early. NHS staff are part of the health service’s pension scheme, which gives an annual income in retirement based on the number of years they have worked and their salary. Shorts The pension can usually be accessed between 60 and 67 – depending on when you started working in the NHS – though some people can retire earlier if they agree to take a reduced payment. But last year, 810 workers were awarded “tier 1” ill health retirement, which means they cannot work in their current NHS role, but could continue work elsewhere. As such, they can start taking their pension earlier than they would have been able to, but the amount they take is not reduced, as it would be if they voluntarily retired. A further 1,991 workers were awarded “tier 2” retirement, meaning they are permanently unable to do their specific NHS job or other alternative employment. These people can access their pension early and also get a larger payment based on prospective work they would have done if they had not become ill. The figures were gathered by financial advice firm Wesleyan, which obtained the data from the NHS Business Services Authority via a Freedom of Information request. How are the numbers changing? There are more applications for ill health retirement than there used to be. A total of 2,132 applications were made in 2021/22, and 2,769 in 2022/23, compared to 3,062 last year. Though the bar is high and earlier retirees must provide medical evidence for their reasoning, most applications are accepted, with a rejection rate of just 15 per cent last year. Why are the numbers going up? Experts said the increasing number of applications likely reflected the rise in burnout in the NHS. Wilf Moralee, chartered financial planner at Wesleyan, said: “While the data itself can’t tell us exactly what’s behind it, it certainly reflects what we’re seeing day to day, with increasing levels of burnout across the NHS. “There is a real sense that many doctors aren’t able to follow the ‘put your own air mask on first’ advice before things reach a crisis point. Too often, they’re putting everyone else’s needs ahead of their own until continuing to work simply isn’t possible. “What stands out is not just the increase in applications, but that more of those applications are resulting in awards. “In particular, the continued rise in tier 2 awards is concerning because these are people who have been assessed as permanently unable to undertake any regular employment before pension age.” Dr Amit Kochhar, representative body chair at the British Medical Association, said: “While it is not clear what is behind this worrying increase in the number of NHS staff taking early retirement due to ill health, what is clear is that the workforce pressures created by preventable staffing shortages have had a deleterious effect on their wellbeing. “Early retirement due to ill health means potentially years lost from senior expert medical staff and their ability to treat patients.” How do you apply and how does it impact your pension? “There are likely to be healthcare professionals on long-term sick leave who aren’t aware of the scheme, assume they won’t qualify or find the process too daunting to navigate,” Moralee says. To be eligible for ill health retirement, you must have been a member of the NHS pension scheme for a minimum of two years, not reached normal pension age and become too ill to work in your present job. If you think you might be eligible, the NHSBSA has guidance on how to apply here. The NHS pension functions differently depending on when you started working for the service. For newer employees, you build up pension at a rate of 1/54th of your pensionable earnings each year. As an example, if you’ve worked for the NHS for 10 years and earned an average of £40,000, then you’ll get £40,000 ten times, or £400,000, divided by 54, each year in retirement. That means you will get about £7,400 per year. Your entitlement then grows each year while you are working using the Consumer Prices Index (CPI) plus 1.5 per cent.