Frontline NHS nurses face working into their 70s if state pension age rises

This could mean several years of additional work to build up a substantial retirement pot, particularly for those in demanding frontline roles such as paramedics or nurses who are on the lower to middle pay bands.

Sir Steve Webb, former pensions minister and partner at LCP, said: “Any future change to the state pension age could mean that the age at which younger nurses, teachers and other public servants can draw a full workplace pension will rise in parallel.

“It would not be surprising if the youngest people in the workforce today ended up with a state pension age as high as 70, with knock-on effects on their ability to access their workplace pension in full.

“Long gone are the days when long-serving public servants could hope and expect to retire on a good pension at 60 or even earlier.

“Today’s young public servants need to realise that although the pension they are building up is very valuable, they are likely to have to wait much longer to receive it than in generations past.”

Although NHS workers can retire younger, this means receiving smaller amounts of their pension spread over a longer period. This is because NHS pensions are defined benefit (DB) schemes, meaning payouts are based on salary and years of service rather than investment returns like in most private sector pensions.

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As a result, NHS staff typically receive a more generous and predictable retirement income than in the private sector, often a percentage of their final or career-average salary. Early retirement can be financially viable, but results in smaller payouts over a longer time frame.

The state pension age is currently 66 and is already poised to rise to 67 between 2026 and 2028, and to 68 between 2044 and 2046.

Last month, work and pensions secretary Liz Kendall announced a statutory review of the state pension age, which could pave the way for a further or faster rise.

The review, a legal requirement every six years, will consider whether the current state pension age is still appropriate, based on factors such as life expectancy, and is due to conclude in 2029.

Any changes are unlikely to be agreed before the next election, due the same year, meaning the state pension age and soaring cost of the triple lock could become a major political flashpoint. Nigel Farage, whose Reform Party is leading in the polls, has already said a further rise to the state pension age is “inevitable”.

Jonathan Halberda, specialist financial adviser at Wesleyan Financial Services, said: “For many NHS staff, especially those in physically and emotionally demanding frontline roles, potentially extending their working lives without meaningful reform will be concerning.

“Early and informed planning can make a real difference. Making use of tax-efficient savings options and regularly reviewing your retirement goals can all help ensure you’re able to retire on your own terms, regardless of when the pensions kick in.”

Edmund Greaves, financial expert at money blog and podcast Mouthy Money, urged younger NHS workers to review their retirement plans.

He said: “The consequences could be very real if the state pension age rises again.

“It would mean a nurse or paramedic currently planning to retire at 68 could find that shifting higher, perhaps beyond 70, depending on Government decisions. But with another review underway, the issue deserves urgent attention.”

The International Longevity Centre (ILC) has suggested that the state pension age may have to rise to 70 or even 71 by 2050.

It comes following analysis from the Government that people looking to retire in 2050 are on course to receive £800 per year less than current pensioners.

Kendall has resurrected the Pensions Commission, a New Labour-era quango, to examine how to tackle the issue of people failing to put enough into their retirement savings. It is hoped that improving private pensions will take some pressure off the state system.

According to the Office for Budget Responsibility’s (OBR) latest report, rising life expectancy and the triple lock could push the cost of the state pension up from £138bn per year to £200bn by 2073.

Simon Day is worried about when he’ll be able to retire, as are his colleagues

‘Most of us cannot see doing the job at 67, never mind 70!’

Simon Day, 58, a paramedic from Telford, has worked in the ambulance service for 17 years – 11 of them on the frontline – and has paid into his NHS pension throughout.

But with the state pension age under review, he’s increasingly concerned about what retirement might look like for his younger colleagues.

As he is 58, none of the changes will affect him personally, as 10 years’ notice is given for changes to the state pension age, and the current review will not conclude until 2029.

He said: “The physical and mental toll of long service in the NHS means it’s not the same story for everyone.

“It’s a sad state of affairs when your financial security, as you enter the end of your career, is so often down to luck.”

For Mr Day, he can retire from age 60 with his current NHS pension. The idea of working into his 70s in such a high-pressure, physically intense role feels impossible, though.

He explained: “Most of us cannot see doing the job at 67, never mind 70.
“Shift work, lifting and carrying, the mental stress and adrenaline ‘rush and dump’ that comes with it are not conducive to health.

“Statistically, the ambulance service has a high correlation with PTSD, and it only takes one injury to end or significantly affect your career.”

Mr Day is frustrated that paramedics are not treated equally to other emergency service workers when it comes to retirement benefits.

“Most of the public would probably be surprised to find that we are not put on an equal footing with our blue light colleagues,” he said, referring to police officers and firefighters, both of whom typically retire earlier due to the demanding nature of their roles.

“We should be considered along the same lines. Changing retirement age will have an impact on contributions or final pension amounts, and the expectation will be on staff to bear this cost.”

Mr Day is affiliated with the Trades Union Congress through his GMB union membership and has spoken at an event of the TUC from an NHS/Ambulance service perspective.

‘It pays to be as prepared as you can be’

Experts say it always makes sense to plan retirement from as early an age as possible and to remain with the NHS pension.

Graham Crossley, NHS pensions expert at Quilter, said: “Whilst the normal pension age of the 2015 scheme is linked to state pension age, you can retire earlier.

“The minimum age is currently 55, rising to 57 from 6 April 2028, but would likely rise again, keeping in line with the policy standard of 10 years below the state pension age.

“If you do take the pension early, there is no ‘penalty’ as such; instead, there is an actuarial reduction to reflect the fact that the pension will be paid over a longer period of time.”

Extending the state pension age could significantly reduce the cost of the NHS pension scheme, which is governed by a cost cap mechanism, Mr Crossley said.

The NHS pension cost cap mechanism is a Government safeguard that checks every few years whether the scheme is becoming too expensive or too cheap, triggering changes to benefits or contributions if costs drift too far from a set target.

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said any changes would have an “enormous impact”, so “it pays to be as prepared as you can be”.

She said: “It’s well worth checking to see what your position would be in terms of income from the scheme if you were to retire earlier than that, and also factor in the impact of not having the state pension to supplement what you have for a few years.

“Taking the time to think about how you would plug the gaps with other savings is really important, so you don’t have any nasty surprises.”

The Department for Work and Pensions declined to comment.

Five things those affected can do

1. Check your pension age and projected benefits – check your NHS pension age and projected benefits at different retirement points. This is the starting point for any sound retirement planning, Mr Greaves said.
2. Understand the cost of retiring early – you can still access your pension earlier than your full pension age, but your benefits will be actuarially reduced. That means receiving a smaller monthly pension for life. Ask NHS Pensions for a breakdown of what your payments would look like at different retirement ages, so you can weigh the cost of going early.
3. Build a flexible retirement plan – given the uncertainty, it is wise to avoid pinning everything on a single retirement age. Instead, think about a range of scenarios based on different retirement dates and income levels and how your current arrangements would fit. The more adaptable your plan, the better prepared you will be.
4. Stay informed on state pension age changes – the Government is currently reviewing the state pension age. Any change would also affect the full pension age under the 2015 NHS scheme. Keep an eye on updates from the Department for Work and Pensions (DWP) and trusted financial sources so you are not caught off guard.
5. Consider topping up your pension – if you are worried about a pension shortfall, explore options such as setting up a private pension or self-invested personal pension (SIPP). Even modest contributions now can help buffer any reduced income if you retire before your full pension age.