When you get your personal or workplace pension
When you can take money from your pension pot will depend on your pension scheme’s rules, but it’s usually after you’re 55.
You may be able to take money out before this age if either:
- you’re retiring early because of ill health
- you had the right under the scheme you joined before 6 April 2006 to take your pension before you’re 55 – ask your pension provider if you’re not sure
Some companies offer to help you get money out of your pension before you’re 55. This could be an unauthorised payment and you’d pay up to 55% tax on it.
Your pension pot will probably be smaller if you retire early because you’ve:
- had fewer years to pay into a defined contribution pension scheme
- been in a defined benefit pension scheme for fewer years
If your life expectancy is less than a year
You may be able to take your whole pension pot as a tax-free lump sum if all of the following apply to you:
- you’re expected to live less than a year because of serious illness
- you’re under 75 (if you’re over 75 you pay 45% tax on the lump sum)
- you don’t have more than the lifetime allowance of £1.25 million in pension savings
Check with your pension provider. Some pension funds will keep at least 50% of your pension pot for your spouse or civil partner.