What is partial retirement?

Partial retirement allows members to take some or all of their pension and carry on working.

Why would I partially retire instead of fully retiring?

Partial retirement lets you take some or all of the pension you have built up and continue to work. While you stay in work, you can continue to build up more pension.

Can I partially retire?

Partial retirement is available for all active members subject to agreement from your employer, but you must:

  • be over your minimum pension age
  • have built up some alpha pension
  • be able to reduce your earnings by at least 20%.

Because partial retirement involves making changes to your job to reduce your earnings, you must have the agreement of your employer. If your employer agrees to the changes, you can apply.

Do I have to wait until my Normal Pension Age (NPA)?

No. You could partially retire from alpha’s minimum pension age which is currently age 55. But if you do partially retire before your alpha NPA, your pension will be reduced because it is likely to be paid for a longer time.

How do I reduce my earnings by 20%?

This can be done in one of two ways.

  • Changing your job – to a lower paid role.
  • Changing how much time you work – dropping your contracted hours.

If I change to a lower paid job, does it have to be with the same employer?

No. Both employers must be covered by the Civil Service Pension arrangements and you must not have a break in service between jobs. Because you are changing where you work, you will need to get both employers to sign your application.

How does partial retirement work?

After your employer agrees to you changing your job so you are able to partially retire, the Scheme Administrator (MyCSP) will give you a quote of the pension you have built up, and the forms you will need to complete to apply for partial retirement. You must give at least four months’ notice.

You can decide how much of your alpha pension you want to take. This can be up to 100% of what you have built up so far. Once you have made your choice, you will need to complete and return the forms.

The Scheme Administrator (MyCSP) will put your chosen pension into payment as close to your partial retirement date as possible.

You will remain at work, earning at least 20% less, and receiving your pension too. If you choose to remain in alpha, you will build up a further pension that you can claim when you fully retire.

How many times can I partially retire?

You can only partially retire once using your alpha pension benefits.

Will my alpha pension be reduced (abated) because I am still earning?

No. Any alpha pension you receive will be paid in addition to your salary. alpha pensions are not subject to abatement.

What if I have an EPA or a Club transfer in?

Each EPA part of your pension is adjusted for late or early payment independently; see Sections 02E and 02F for more details on late payment and early payment. A Club transfer is adjusted in the same way.

In these situations your alpha pension can be made up of multiple portions. Your main alpha pension, any EPA portion of your pension you have bought, and any Club transfers you have brought in.

You can choose one of these portions, and then select to use any amount from that portion for your partial retirement. This can be anything up to 100% of that portion of your pension.

For each of the remaining portions, you can choose to take all of it, or leave it until you fully retire. You cannot take a percentage of these other portions.

Can I still exchange some alpha pension for a lump sum?

Yes. This is based on your pension that will be coming into payment. You will get the details of the maximum amount you can take with your partial retirement quote. This is subject to the usual limits set by HM Revenue & Customs. Your alpha pension will be less if you take a lump sum.

What about tax?

When your pension comes into payment it will be checked against the Lifetime Allowance (LTA) to see how much of the LTA it uses up. If your pensions go over 100% of the LTA you will have to pay a tax charge.

Pensions in payment are taxed as an income, so the exact amount you pay is determined by how much you get. Any lump sum that you choose is usually tax-free.

Partial retirement and the Principal Civil Service Pension Scheme (PCSPS)

This section only applies to members who were in the PCSPS (classic, classic plus, premium, or nuvos) before 01 April 2015, and then moved from that scheme into alpha.

It does not cover every aspect of the scheme; full details are set out in the scheme rules, which are the legal basis of the scheme. You can find copies of the PCSPS scheme rules on the Civil Service Pensions website.

Nothing in this guide can override the scheme rules. Every effort has been made to make this guide as accurate as possible, but in the event of any difference, the rules will apply. This guide is based on the rules current at the time of publication and there is no guarantee that any part of the rules will not change in the future. You should be aware that tax rates and limits are subject to change.

If this section applies to you, please read it carefully to understand your options at partial retirement from both your alpha and PCSPS pension.

If you have either banked benefits, or banked service, from the PCSPS your total pension will be made from different portions; your PCSPS benefits and your alpha pension (and any EPA portions of your pension or Club transfers you have).

What pensions can I claim at partial retirement?

You can choose to claim some or all of your pensions at partial retirement. For example, you may wish to choose to claim either your PCSPS pension, or your alpha pension, or if you wish, you may choose to take them both at the same time.

Can I choose to partially retire only using my PCSPS pension?

Yes. You still need to meet the requirements of reducing your earnings by 20%, be over your minimum pension age and your employer must agree.

My PCSPS minimum pension age is 50. Can I partially retire at that age?

Yes, but only using your PCSPS pension, and your employer must agree.

Can I choose to partially retire and not take any of my PCSPS pension?

Yes. You can choose to leave your PCSPS benefits to be claimed at a later date and take your alpha benefits only as long as you are over your alpha minimum pension age.

How many times can I partially retire?

You can only partially retire once using your alpha pension benefits and once using your PCSPS pension benefits.

If you choose to take the alpha and PCSPS parts of your pension at the same time, you can only partially retire once.

If you choose to claim only your PCSPS pension at partial retirement, you can, at a later date, choose to partially retire only using your alpha pension.

You can do this the other way round too, if you partially retire only using your alpha pension, you can partially retire at a later date using only your PCSPS pension.

If you choose to partially retire a second time using the other part of your benefits, you must meet all the criteria again. Your employer must agree, you must be over the minimum pension age, and you must reduce your earnings by a further 20%.

My PCSPS pension was based on a final salary. When is this worked out?

This is worked out at, or close to, the date you claim your pension under the rules for the relevant section of the scheme.

Do I get a lump sum from the PCSPS part of my benefits?

In premium and nuvos, you get the option to exchange some of your pension for a lump sum. If you were a classic or classic plus member you will still get the automatic lump sum and you may have an option to exchange some of your pension for an additional lump sum.

I was in classic / classic plus. Can I get a refund of Widows Pension Scheme (WPS) contributions?

You can receive a refund of your WPS contributions, if you were always single while a member and have remained single until you claim your pension. You may also get a refund if your marriage / civil partnership ended while you were a classic / classic plus member and have remained single until you claim your pension. The Scheme Administrator (MyCSP) will check your eligibility when working out your pension.

Your refund will be paid when you claim all of your PCSPS pension. It can be paid at partial retirement, if you claim 100% of your PCSPS pension. If you do not claim 100%, any WPS refund will be paid when you fully retire but may be subject to extra tax or need to be converted into pension.

What is abatement and will it apply to me?

If you partially retire using your PCSPS benefits your pension may be abated while you continue to work. This is because your PCSPS pension and new salary added together cannot be more than your salary before you partially retired.

Published:
14 December 2021
Last updated:
25 January 2022