Discover how dentists can protect their retirement income and maintain lifestyle goals. Learn why early planning and tailored pension strategies are essential for bridging gaps in NHS pension provision.
Retirement may seem like a distant chapter for most dentists, but for many, the reality may be closer and less secure than it appears.
Despite years of steady income and careful career planning, a surprising number of dentists discover in their fifties that their retirement plans fall short of expectations. Two factors are often to blame: the decision to retire early without adequate preparation, and the failure to replace the NHS pension scheme when reducing or leaving NHS work. Both can leave a gap that feels impossible to close if left unaddressed.
The challenge is compounded by the tendency to put off thinking about retirement. Busy practices, family commitments, and the pressures of patient care make it easy to assume that planning can wait. Yet every year that passes without action reduces your options.
The earlier you start planning, the more time you give your savings to grow, and the less you need to contribute each month to secure the retirement lifestyle you want. Planning early is not just about money, it’s about control, freedom, and the ability to shape your future rather than being shaped by it.
Understanding the impact of early retirement
Many dentists will have built up benefits through the NHS pension scheme, either via ongoing contributions or accrued service from previous NHS work. The normal retirement age for the 2015 scheme is linked to the state pension age, meaning it could range from 65 to 68 depending on the individual.
While it is possible to access benefits from the age of 55 (set to increase to 57 in 2028), doing so triggers an actuarial reduction. This reduction permanently lowers the annual pension you can expect to receive in retirement and can have a significant impact on lifestyle if it is relied on as the primary source of retirement income.
Accessing your NHS pension before the normal retirement age can have a lasting impact on your income in retirement. Drawing benefits early may seem appealing, but it reduces the annual pension you receive for the rest of your life. By contrast, waiting until your full retirement age can substantially enhance the value of your pension, giving you greater financial security and flexibility.
The effect of reducing NHS work
Another challenge arises when a dentist decides to reduce NHS commitments or transition fully to private practice. Private work can bring higher earnings, but it also means losing or reducing benefits previously received under the NHS, including the ability to contribute to the NHS pension. Although, it’s worth noting that you don’t lose the NHS pension accrued up to the point you decide to stop or reduce NHS provision.
If these benefits are not replaced, a gap emerges in long-term retirement funding. The earlier personal pensions or alternative provisions are introduced, the more opportunity there is for growth over time. Waiting too long can make it more difficult to catch up, as pension funds benefit from the compounding effect of years invested.
Personal pensions as a bridge
Personal pensions offer an effective way to bridge these gaps. They can supplement NHS benefits or replace them when NHS work is reduced, giving dentists more flexibility and security in planning retirement. With the ability to access personal pensions from age 55 (rising to age 57 in 2028), they can be an effective way of bridging the early retirement gap.
Each dentist’s situation is unique. Career stage, income level, tax considerations, lifestyle goals, and family circumstances all influence the most appropriate approach. For practice owners, retirement planning may also include consideration of practice sale proceeds, which can feed into overall provision. There is no one-size-fits-all solution, making bespoke guidance essential.
Please note: The value of a private pension can go up and down and its value, when you take benefits, might be less than you paid in.
Seeking specialist guidance
Engaging with a dental specialist financial adviser allows dentists to understand their individual position, identify potential shortfalls, and explore strategies to address them. Cash flow modelling can highlight ways to save efficiently, plan for early retirement without unnecessary reductions, and replace benefits lost when reducing or leaving NHS work. With the right guidance, retirement planning becomes a proactive process rather than a reactive scramble, ensuring you can approach this next stage of life with confidence.
If you’d like to explore your pension situation, speak to a dental specialist financial adviser at Wesleyan Financial Services. Visit wesleyan.co.uk/pension-aware or call 0808 149 9416.
Please note: Charges may apply, but you will not be charged until you agree on the services and costs. Learn more at www.wesleyan.co.uk/charges.
This article is sponsored by Wesleyan Financial Services.
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