GP Retirement Planning for 2025: Four Essential Steps

Retirement may feel distant, but for many GPs it’s closer than you think. Whether you’re planning to step away from practice soon or want greater control over your future, 2025 offers the perfect opportunity to start planning.

Today, GP retirement planning goes beyond understanding your NHS pension—it means considering updated tax rules, flexible exit strategies, and retirement goals aligned with your personal values.

This insight from Nichols Medical Accountants, outlines four essential steps to help NHS and private GPs—whether salaried or partners—approach retirement with clarity and confidence.

1. Understand Your NHS Pension Scheme

Your NHS pension remains the cornerstone of your retirement planning. Most NHS GPs hold pension rights in multiple schemes, each with unique conditions:

• 1995 Section: Full benefits from age 60, with an automatic tax free lump sum.
• 2008 Section: Full pension from age 65; no automatic lump sum unless transferred from 1995. You may opt to exchange pension for cash (£12 per £1 exchanged).
• 2015 Scheme: Based on State Pension Age, with no automatic lump sum—but an optional lump sum exists (£12 per £1), capped at £268,275 (2025 limit).

Since April 2022, all accruing members are under the 2015 Scheme alongside past entitlements. Crucially, you can draw from each scheme at different times, allowing tailored financial planning.

McCloud Update

If the McCloud judgment affects you, note that the original March 2025 deadline for Remediable Service Statements (RSS) has been extended. NHSBSA announced on 31 March 2025 that delivery dates vary by cohort—and updated timetables are being communicated continually.

Once you receive your RSS, you’ll have 12 months from the issue date to choose your pension scheme—so stay alert to correspondence. If you haven’t received a statement in line with your group’s timetable, reach out proactively.

2. Benefit from New Pension Tax Rules

Significant tax reforms are changing how GPs should approach contributions and withdrawals:

1. Lifetime Allowance (LTA) was abolished on 6 April 2024.

2. Annual Allowance (AA) is now £60,000, with tapering to a £10,000 minimum for high earners.

Two new allowances now apply:

• Lump Sum Allowance (LSA): £268,275
• Lump Sum & Death Benefit Allowance (LSDBA): £1,073,100

If you took pension benefits before 6 April 2024, you may need to apply for a Transitional Tax Free Amount Certificate (TTFAC) to verify your remaining allowances.

Thanks to AA carry forward rules—and the potential to build unused allowances from the last three tax years—you may be able to contribute more tax efficiently before retiring. To optimise this, work with an advisor to monitor annual pension growth carefully.

3. Time Your Retirement with Flexibility

Retirement doesn’t have to be all or nothing. You now have flexible retirement options that can suit your planned income and lifestyle:

• Start early from age 55 (taking reduced benefits).
• Choose partial retirement, reducing pay by >10% while accessing part of your pension.
• Opt to retire and return, continuing part time work and pension accrual.
• Use staggered drawdown, activating some pension schemes now, others later.

Starting retirement in a fresh tax year can also help optimise tax free cash. To plan effectively, request a pension forecast and draft a timeline aligned with both your financial and lifestyle goals.

4. Plan for Life After Practice

For GP partners, planning for retirement must also cover your exit from the partnership:

• Review your partnership agreement—pay attention to notice periods, exit terms, and premises ownership.
• If you have equity in your surgery, plan how to secure it (sale, leaseback, valuation).
• Submit your final Type 1 Annual Certificate of Pensionable Profit to close your NHS pension record correctly.

Even if you’re not a partner, double-check that your private pensions complement NHS benefits. Most important: envision your retirement life—be it locum work, consultancy, or a “full stop”—and structure your financial plan accordingly.

Ready to Take the Next Step?

GP retirement in 2025 offers more control than ever—if you begin early. By understanding your NHS pension, updated tax landscape, flexible options, and life goals, you’ll be empowered to take confident steps.

Nichols Medical Accountants specialise in supporting GPs through NHS pension reviews, succession planning, and tax efficient withdrawal strategies that enable a secure and confident retirement. For tailored support, visit them at nicholsmedical.co.uk/thedoctorsclub