Five things to consider if you are thinking of retiring in 2022

Simon Appleyard from the Wesleyan Group, the specialist financial services mutual for GPs, shares his advice for those thinking about retirement.

Jar of coins labelled 'retirement'
(Photo: Nora Carol Photography/Getty Images)

The start of a new year often triggers reflection. For some that even includes making big life changes.

The pressures on the profession, which have been amplified since the COVID-19 outbreak began, have prompted many GPs to reconsider their professional and personal priorities. For some this has sparked thoughts about retirement.

For those thinking 2022 might be the right time to step back from the workplace, here are five things to keep front of mind.

1. Full or 'flexi' retirement?

The first thing to think about is your retirement ambition and what you want to achieve through making this move. It could be stepping back from full-time work commitments, spending quality time with family, or to focus on a hobby.

For some GPs, a part-time or ‘flexi’ retirement maybe the perfect balance between keeping a hand in the profession while creating time for other passions or opportunities.

Sometimes circumstances change and you may want to know what flexibility you have to return to work after retirement. For those that retire on or after the normal retirement age there will be no impact on their pension if they chose to go back to work, the same goes to those that retire early but receive benefits after an actuarial reduction – the case for the vast majority of GPs.

It is, however, important to remember that in the 1995 NHS pension scheme a person needs to take a 24-hour break and then may only work 16 hours per week for the first month, otherwise their pension could be affected. For those in the 2008 and 2015 schemes, it’s just a 24-hour break before returning. Due to the pandemic the requirement for working just 16 hours a week has been temporarily suspended. There is more information on 24-hour retirement here.

Once you’ve decided on how you want to manage your retirement – full or flexi – it’s time to talk to your colleagues.Once you’ve decided which option you want to go for, it’s time to talk to your colleagues.

2. Keep colleagues in the loop

For those working in a practice partnership there may be agreements on retirement in place that need to be considered.

For example, some partnership agreements restrict how many partners can retire within a fixed period, which may need negotiating.

Having open conversations with your team around succession planning is essential to avoiding these hurdles and are a good opportunity to be able to adjust partnership agreements, if necessary. 

These changes could include creating exit strategies that incorporate the needs of the business and the individuals. For example, putting frameworks in place on what to do if a retiree owns part of the building, as well as the practice.

Ultimately, good planning will bolster the continuity of patient care, and help safeguard the health of the business.

3. Thinking pounds and pence

The next step is to consider what income you’ll need to fund your retirement lifestyle.

If you’re planning to retire earlier than previously thought, it’s important to understand how this may impact what you have set aside in your pension.

Requesting your Total Rewards Statement (TRS) from the NHS Pension Scheme is a good starting point, even if you’re only in the initial stages of considering retirement. The TRS will let you know exactly how much of your NHS pension you’ve accrued.

You can then combine this information with other retirement savings and look at a holistic picture of financial incomings and outgoings – what money is spent on now, what it might be spent on in the future, along with overall living and lifestyle costs – to see if you have enough saved for the retirement you want.

Establishing financial goals and reviewing outgoings is something a professional adviser can help with.

Some will use specialist cashflow modelling tools that look at current and future data on income, expenditure, and lifestyle to show how cash requirements might rise or fall over time, helping provide a clear overview of what money will be needed. 

4. The McCloud judgment decision

The McCloud judgment refers to the case about the government’s 2015 public pension scheme reforms. Following the reforms, public sector workers took the government to court arguing it had unlawfully treated existing workers differently because of their age. The Court of Appeal ruled in their favour and the government is now rectifying the changes.

As a result, GPs who are part of the NHS Pension Scheme who were in service before 31 March 2012 and on or after 1 April 2015 (including those who’ve taken their pension already) will get to choose how the benefits are calculated between two schemes for the remedy period from April 2015 to April 2022.

It can be a complicated decision with comparisons required on annual pension and lump sum benefits and seeking professional advice can be helpful here.

5. Access wellbeing resources

Finally, retirement is a big life step so it’s important to take time to check in with yourself and ensure you’ve got support in place to help with your wellbeing.

GPs can be used to being under immense pressure but retirement is the time to put your needs first and there are plenty of resources that can help you adapt to this new path.

Whether you’re beginning to think of retirement, or ready to step back completely, making sure you’ve got a robust plan in place is vitally important.

For more information visit Wesleyan here 

  • Simon Appleyard is senior area manager at the Wesleyan Group

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