Will the government's flexible retirement initiative have any effect on the NHS's entrenched staffing problems? Jeremy Davies reports

Since chancellor Gordon Brown's historic pledge of year-on-year funding increases for the NHS in April, the government has consistently grabbed headlines with pledges to recruit extra doctors and nurses.

But politicians are as aware as anyone that it will be many years before these new cohorts take their first, tentative steps on to the wards as qualified professionals.

Despite a successful recruitment campaign last year, nursing shortages remain acute, and at entry level there is a long way to go to turn the tide.

Numbers of nursing students and pupil nurses in 1994 were less than half those in 1984. The register of the UK Central Council for Nursing, Midwifery and Health Visiting showed its largest annual decline in numbers of practitioners in 1998, and although the figure rose in 1999 it was still more than a third lower than the 1990 figure of 19,000.

1And while in medicine overall recruitment levels are holding up, general practice has been experiencing a recruitment crisis for some years, with figures from the joint committee for postgraduate training in general practice showing that the number of doctors qualifying as GPs fell to a new low of 1,636 in 1998 - 36 per cent lower than in 1981.

2All of which helps explain why the Department of Health has asked human resources managers to focus their efforts on persuading older NHS staff, who might otherwise retire, either to stay on for a few more months, step down to part-time work or at least put themselves forward for occasional shifts.

In its guidance on flexible retirement (HSC 2000/22 issued in July) the NHS Executive called on employers to 'extend the contribution of staff about to retire and. . . attract back recently retired staff '. Trusts should also set up a winter register and develop a 'keep in touch'scheme for retiring and retired staff, it said.

HR managers have broadly welcomed the guidance, which collates information about a range of existing flexibilities within the NHS pension scheme (see box 1).

'Publicising the different options for people in this way will allow trusts to have more open debates with staff about what they want to do with their later years in the workplace, 'says Jim McCaffrey, HR director at St James' University Hospital in Leeds.

'Staff pension enquiries are often dealt with by 'number-crunchers' in accounts departments, which can mean people don't get the chance to think about their retirement in a creative way, 'agrees Josie Irwin, senior employee relations adviser at the Royal College of Nursing. 'This could help bring about more constructive discussions. '

But beyond its more user-friendly style, the only fresh element in the guidance is access, via regional offices, to a£12m fund to support recruitment and retention initiatives within an overall funding boost to alleviate winter pressures.

The guidance suggests that trusts should identify key staff who may be planning to retire from the service and discuss with them the possibility of staying on in some shape or form. Bids to fund additional voluntary contributions to the NHS pension scheme on staff members' behalf, where appropriate, are encouraged.

There is cynicism in some quarters at the guidelines' attempt to link short term political hot potatoes, such as the winter crisis, and the more long term structural issues that make high retirement levels so problematic.

One nurse manager suggested that the directive had not been well thought through and 'smacked of someone in Quarry House being given the job of producing something 'positive-looking on retention' so as to be seen to be tackling another looming seasonal disaster'.

For more forward-looking HR departments, flexible retirement is already a key weapon. HR managers encourage staff to view retirement as another in a series of career phases to be thought about and planned well in advance, rather than a brick wall to be hit on one's 60th or 65th birthday.

Staffordshire Ambulance Service trust, for example, has beacon status for its 'retired re-employed' scheme, which was developed in response to the physically and emotionally demanding work of frontline ambulance staff. The scheme allows older ambulance staff to reduce their workload and enter a phased retirement programme. Staff are able to semi-retire while still in good health, and the trust says the programme has helped increase staff motivation generally as well as cutting sickness absence rates.

But the need for new approaches to retirement, along with other flexible working approaches such as career breaks and improved continuing professional development, is likely to become even more pressing in the future. So much so, in fact, that the NHS plan promises to accredit all NHS employers against an 'improving working lives' standard covering such issues by April 2003.

One problem is the 'greying' of parts of the NHS workforce. The average age of a nurse on the UKCC register is now around 40, for example, and more than a quarter of health visitors and district nurses are over 50.

1 In medicine, there are particular problems around the impending retirement of large numbers of Asian doctors attracted to Britain in the 1970s - many of whom prop up inner city general practice and have no obvious successors.

This ageing of the workforce is by no means a trend peculiar to the health service. Figures from the Employers' Forum on Age show that by 2026, the 16-24 year-old age group will form the smallest section of the UK's working population, with 25-34 year-olds falling from 25 per cent to 20 per cent, and the 55-64 year-old age group becoming the largest cohort, at 24 per cent of the total.

At the same time, analysis of the UK Retirement Survey shows that over the past three decades, the actual participation of 55-64 year-olds in the workforce - in effect, the amount they contribute to the economy - has been declining in the case of men and merely staying static in the case of women.

3 In the NHS this is reflected in growing evidence that an increasing proportion of professionals are choosing to retire before the standard retirement age. Research on the nursing workforce suggests that early retirement will become a big issue around 2005 or 2006 as large numbers of nurses reach their mid-50s. And as for doctors, the 1997 report of the medical workforce standing advisory committee quoted 4. 2 per cent of doctors leaving the profession early. But a 1999 Association of Surgeons survey found that 62 per cent of consultant surgeons intended to retire at the age of 60 or lower. A study conducted at Milton Keynes General Hospital found that of all the consultants at the trust,48 per cent intended to retire before the age of 60. All the doctors in one specialty - paediatrics - pledged to retire early.

4 Among a cohort of more than 1,000 doctors who qualified in 1977, only 65 per cent of male doctors and 68 per cent of women said they intend to work in the NHS until normal retirement age.

5 A North West region study on GPs' retirement intentions found that 80 per cent of GPs planned to retire before they reached 65.

6 The 2000-01 doctors' and dentists' review body identified early retirement as a major issue to be considered in evidence to this year's inquiry, calling for more comprehensive monitoring of the problem nationally.

There are no centrally held figures on NHS managers' retirement patterns, but NHS Confederation head of HR policy Andrew Foster says that early retirement among managers is also becoming commonplace.

This is partly because of the government's drive for trusts to generate cost savings on what are termed 'M2'appointments - broadly speaking, managers who earn more than£25,000 a year and spend less than 50 per cent of their time delivering a clinical service. 'Each trust has a baseline for M2 costs and annual targets to cut them, 'Mr Foster explains.

As a result, there are fewer jobs for 'men in grey suits' and consequently a greater tendency for a proportion to leave the service via early retirement.

So is the DoH on the right track in trying to shore up the older end of the job market by offering potential retirees something more flexible than a proverbial bottle of bubbly and carriage clock?

Increases in clinical workload have become a fact of life in the NHS in recent years. This is behind the government's decision to recognise senior nurses' contribution by developing nurse consultant posts and other responsibility-linked pay enhancements, and behind the consultants' as yet-unpaid£60m pay boost linked to workload intensity.

In this context, any initiative that allows professionals to take a break from full-time responsibility - at whatever stage of their career - is likely to improve morale and, therefore, retention.

Certainly in the North West region study cited above, nearly half of doctors said greater availability of opportunities for more part-time work would be the factor most likely to make them delay their decision to retire.

Interestingly though, almost a third said they would stay in work longer if offered more money. As one put it, 'everyone has a price'.

With this in mind, the British Medical Association is already arguing for doctors to be able to accrue extra pension benefits between the ages of 60 and 65. It also wants an end to the rule that means members who wish to return to work after retiring must leave the NHS for a month before doing so. 'We want pension arrangements made more flexible so people can still draw their pension when they want to, but can continue working, or return to work, and stay in the scheme to build up a bigger pension, 'says BMA superannuation committee chair Dr Simon Fradd.

On a more fundamental level, the BMA, alongside the RCN and Unison, wants the DoH to consider potentially costly improvements as part of its NHS pension scheme modernisation review.

'The NHS pension scheme is outmoded, 'says Dr Fradd. 'It's a slow scheme in terms of accumulation of benefits. There are issues about the way it's managed, and about not being able to nominate beneficiaries other than spouses, for example.

'We might end up saying that members themselves need to pay a bit more to gain certain improvements - who knows? But what we should be pushing for is the best scheme around - not just for members but also because of the payback for employers. '

The government's flexible retirement guidance looks like a step in the right direction, even if the style is more impressive than the substance. But despite already having bitten the bullet and invested more in recruiting youngsters to the NHS, ministers may yet need to put even more money where their mouths are.

The NHS pension scheme gives members an annual pension of one 80th of their pensionable pay - defined by their salary in their last year of working for the NHS - for each year of membership (see box 3). For example, if you retired on a salary of£40,000 after working for the NHS for 20 years, you would get a pension of 20x£500 =£10,000.

Once retired, members are paid their pension monthly for the rest of their lives. They also get a tax-free lump sum, normally equivalent to three times the amount of the annual pension.

There are limits on the amount of membership that can count for pension benefits - no more than 40 years' worth at age 60, and no more than 45 years altogether. Membership ceases after the age of 70. Members can improve their pension benefits by buying 'added years'- that is, paying extra to artificially inflate the number of years' NHS service in the final calculation. They can also make additional voluntary contributions via a scheme run for the NHS Pensions Agency by Equitable Life.

The NHS pension scheme is designed around a standard retirement age of 60. Female nurses, midwives, physiotherapists, occupational health nurses and health visitors are entitled to retire with full pension benefits from the age of 55; men in the same jobs can also retire from 55 onwards, but they can only draw benefits accruing from membership from May 1990 onwards - they cannot claim the rest until they reach the age of 60.

Part-time staff have their membership and final year's pay factored up to the equivalent full-time amounts for the purposes of calculating their pension. So, for example, if you worked three years full-time then six years half-time, and your final year's pensionable pay was£5,000, your pension would be worked out on the basis of six years' worth of membership, and with a final salary of£10,000.

Members can take voluntary early retirement from the age of 50, subject to agreement from their employer (see box 2). Staff who take early retirement receive only a proportion of the full value that their pension would have reached had they stayed on until age 60. The table below shows what proportion of the pension and tax-free lump sum one would receive at each retirement age.

Still going strong Helen Turner (right) started nursing when she was 17, took some time off to bring up her five children, retired as a midwifery sister at the age of 60 and then did agency work. Now aged 78 she works in a nursing home with 41 residents near her home in Surrey, doing two or three afternoon shifts a week.

'I have thought of leaving, but the home is always short of nurses and nursing is just part of me. I hope the government is successful in getting nurses back to work. I am sure there must be a lot of retired nurses who can make a real contribution. '

The government is promoting three ways in which staff can retire flexibly from the NHS:

Winding down This means working fewer days in your current post. Because pensions for part-time staff are calculated on the whole-time equivalent salary, it is possible to wind down rather than retire, and not reduce your eventual pension - although obviously in the years you're working part-time you're paying in less to your pension than you would have been if you'd stayed on full-time.

Stepping down This means changing job. If the pressure and workload have become too much, members might prefer to consider a less demanding job on lower pay, rather than retire. In this situation, with the agreement of management, it is possible to freeze the pension already earned before the step down and start a second pension based on the stepped-down pay. The frozen pension would be index-linked, and on retirement both pensions added together would be payable.

Coming back This means retiring, but continuing to work in some capacity. Members over 60 can retire and the amount earned afterwards has no effect on pension income - and thanks to a rule change introduced this April, this is also now true for those taking early retirement. Before this change, members retiring under 60 had their pension abated, so their post-retirement NHS earnings and pension were not more than their previous NHS earnings. But they cannot continue contributing to the NHS pension scheme once they have retired, and can only return to work for more than 16 hours a week after leaving the NHS for a month.


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2 . Memorandum of evidence to the Review Body on Doctors'and Dentists' Remuneration. British Medical Association, September 1999.

3 Blundell R, Tanner S, Labour-force participation and retirement in the UK. Institute for Fiscal Studies, December 1999.

4 Snell J. Fleet of foot. HSJ;2000:26-8.

5 Davidson J, Lambert T, Goldacre M. Career pathways and destinations 18 years on among doctors who qualified in the UK in 1977. Br Med J 1998:3 1 7:14258.

6 Mathie T, McKinlay D. A General Practitioner Retirement Survey in the North West Region. NHS Executive, August 1999.