Afterwards they could return to work if they wished, having collected both a sizeable tax-free lump sum and a monthly pension payment - in addition to their drawings from the practice. Not only that, but those drawings attract no deductions for pensions. For many doctors, 24-hour retirement meant their combined monthly income was higher than they had earned in the past.
But the financial crisis has added a new dimension to the decision-making process. The decline in house prices, the devaluation of the pound, a volatile share market, minimal returns on bank deposits and the ever-present threat of inflation means that it is now very difficult to find a safe place to invest a pension lump sum.
A doctor retiring today might receive a lump sum of £150,000, but a combination of inflation and devaluation may make this worth £125,000 in a few years. Can anyone nowadays reliably invest £150,000 so as to keep its value, never mind making a profit?
The problem is intensified because both pension and lump sum are index-linked until drawn. Once the lump sum is taken it no longer automatically keeps pace with inflation/devaluation.
GPs may exchange part of their future monthly pension for an increased lump sum: but this means exchanging inflation-proofed regular income for extra cash that is at risk from inflation. In the past, accountants usually advised GPs to take 24-hour retirement within two years of reaching 60. That advice probably still stands because the ability to combine index-linked pension and full drawings is compelling.
However, the lump sum presents a problem. If a retiring GP in good health has either debts - especially high-interest ones - or plans an immediate capital purchase such as a boat, then it's easy: use the lump sum to pay for it. Otherwise, beware: it will almost certainly be safer not to exchange future inflation-proofed income for an increased but potentially devaluing lump sum.
Dr Lancelot is a GP from Lancashire. Email him at GPcolumnists@haymarket.com.