Can you work after ill health retirement?

Can you work after ill health retirement? Often yes, but your scheme's own rules decide whether the pension is reviewed, cut or stopped.

Which pension you hold matters more than the job you are thinking of taking. Pension Wise, the free, impartial and government-backed service from MoneyHelper, explains the options for a defined contribution pot, while public service and final salary schemes set their own rules. Not sure which scheme you are in? An FCA-authorised adviser can sort that out on a phone call that costs you nothing, and you can request one on this page's form.

Can I work after ill health retirement?

Often you can, but whether the pension carries on in full depends on the scheme paying you.

HMRC's Pensions Tax Manual says an ill health pension can be paid before the normal minimum pension age if the scheme holds a registered medical practitioner's evidence that illness stops you doing your current occupation, now and in future, and "the member ceases to carry on that occupation." The same page adds that "scheme rules may have stricter ill-health criteria" and that a scheme pension paid on ill-health grounds "may be reduced or stopped at any time" without unauthorised payment charges. The test is tied to your current occupation, not to every kind of work.

The scheme paying you, the tier you hold and the hours and pay of the new job settle the answer. Who qualifies at all is covered in ill health retirement in the UK, and the age angle in ill health retirement age.

What happens if you go back to work in a public service scheme?

It depends on the scheme and the tier of your award, and the five below differ a good deal. Schemes run separately in Scotland or Northern Ireland may differ again, so ask that scheme directly.

Local government (LGPS, England and Wales)

The LGPS member website says Tier 1 and Tier 2 pensions are each "paid for the rest of your life". Tier 3 "is paid temporarily" and stops when you start gainful employment, defined as "paid employment for at least 30 hours a week for a period of at least a year." How the employer judges a job, the 18-month review and when the pension can restart are set out in LGPS ill health retirement.

NHS (England and Wales)

NHS Pensions publishes a factsheet on returning to work after ill health retirement. A Tier 1 pensioner can rejoin the 2015 Scheme straight away and a Tier 2 pensioner one year after first returning to work, but not at 75 or over, and nobody who took a serious ill health lump sum can rejoin (cashing in a pension because of ill health explains that route). Tier 2 carries two limits: no more than 12 months of NHS work from the day you first restart, and, in any job, NHS or not, gross earnings in a tax year within the lower earnings limit for primary Class 1 National Insurance. Break either and Tier 2 is replaced by Tier 1. After the earnings limit only, you may be able to regain Tier 2 by being under pension age, stopping work altogether and sending new medical evidence within 12 months of first restarting. Returning to NHS work before normal pension age can also bring abatement, where part of the pension is cut if your new earnings plus the unearned part of your ill health pension come to more than you earned before retiring. More is in taking your NHS pension and still working.

Civil service

In the civil service scheme in force since April 2015 (the 2014 regulations), an award has a lower tier earned pension and, in the most serious cases, an upper tier top-up that runs until prospective normal pension age. The scheme medical adviser must review the upper tier periodically, at least every 5 years, until normal pension age. It ends three months after an opinion that you are no longer incapable of gainful employment, or earlier on the day you return to service in a scheme employment.

Police

Under the Police Pensions Regulations 2015, a lower tier pension paid on its own can be reviewed before normal pension age. If a selected medical practitioner decides you are fit again for the ordinary duties of a police officer, you may be given notice to rejoin within three months at no lower rank, and the pension stops at the end of that period or when you rejoin. An enhanced upper tier pension can be reviewed before State Pension age at intervals of no less than 5 years; it stops three months after a report finding you fit for regular employment, or earlier if you return to eligible service. The lower tier then stays payable for life unless a review finds you fit for ordinary police duties. Taking a police pension early gives the wider picture.

Teachers

The Teachers' Pension Scheme Regulations 2014, which cover England and Wales, say an ill health pension stops, unless you have reached normal pension age, when you re-enter eligible employment or do any work as a teacher that is not eligible employment. Before normal pension age, a total incapacity pension also ends if you take any other form of work, unless a registered medical practitioner certifies that you still meet the total incapacity condition and the scheme manager is satisfied. Earlier-retirement routes are in taking your teachers' pension early.

Do private schemes and deferred pensions follow the same rules?

Not necessarily, because a private defined benefit scheme writes its own terms within the tax limits above. Its booklet or trustees will say whether work is allowed, how any review works and what must be reported. Final salary pensions explains how those schemes are built.

Deferred members, who left the job before falling ill, are often treated separately. The NHS 2015 Scheme members' guide (V13, 05.2024) lets a deferred member too ill for regular employment apply for early payment without reduction, though benefits "will not be enhanced". NHS Pensions says its return-to-work factsheet does not cover deferred members who took benefits early because of ill health. In the civil service, a classic scheme member who preserved a pension can apply for early payment if health breaks down after leaving. Ask the scheme in writing how later work would affect a deferred award before you rely on it.

What should you do before you take a job?

Ask the scheme in writing how the job would be treated, naming the hours, the pay and the start date, and keep the reply. Then tell the scheme when you start. The LGPS regulations oblige a Tier 3 pensioner to do so and allow the employer to recover payments made for any period in gainful employment. NHS pensioners must tell their new employer they receive NHS Pension Scheme benefits, and tell NHS Pensions they have returned to NHS employment. Keep your payslips: the NHS factsheet warns that waiting for the annual review before reporting work may mean an overpayment you must repay.

A job offer and an ill health award together make a good case for a conversation, and an FCA-authorised adviser calls after you complete the enquiry form here, with no charge.

Pay from work can also change what you receive from the state and what you owe in tax. See benefits alongside ill health retirement and tax on an ill health pension.

Questions on going back to work after an ill health pension

What counts as gainful employment?

In the LGPS it means paid work of at least 30 hours a week for at least a year. Other schemes use their own tests, such as the NHS earnings limit or the teachers' rule about work as a teacher.

Can I work part time after ill health retirement?

Sometimes. The LGPS definition is built on 30 hours a week, but an NHS Tier 2 pensioner faces a yearly earnings cap whatever the hours. Which test fits you is something a free call-back can talk through if you fill in the form.

Can I go back to my old employer or profession?

That is the move most likely to stop a payment. A teachers' ill health pension stops when you re-enter eligible employment or teach outside it, the civil service upper tier top-up ends when you return to scheme employment, and a police enhanced upper tier pension stops on return to eligible service.

Does working again change my State Pension or benefits?

Benefits depend on your income and are covered on the benefits page. For drawing a pension while employed, taking a pension and still working is the next read.

Weighing a job offer against your pension

Get the scheme's answer in writing first. If you then want your pensions and the offer looked at together, the enquiry form here arranges a no-cost call with an FCA-authorised adviser.