Early retirement, your pension and benefits

Personal and workplace pensions

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. If it’s unauthorised, you pay up to 55% tax on it.

The pension pot that you build up will probably be smaller if you retire early, because it’s had less time to increase in value.

Taking your pension early because of ill health

You might be able to get higher payments if you need to take your pension early because of a health condition. Check with your provider.

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
  • you don’t have more than the lifetime allowance of £1,055,000 in pension savings

If you’re over 75 you’ll pay Income Tax on the lump sum.

Check with your pension provider. Some pension funds will keep at least 50% of your pension pot for your spouse or civil partner.

  1. Step 1 Check when you can retire

  2. and Check how much pension you could get

  3. Step 2 Increase your pension

    You might be able to increase the amount you get if you delay your pension.

    1. Find out about delaying your pension

    For advice about increasing your workplace or private pension, speak to a financial adviser.

    1. Find a financial adviser through Unbiased
  4. Step 3 Check what other financial support you could get

  5. Step 4 Decide when to retire