When can I retire
Many pension scheme rules set an age (usually 60 to 65) or a specific date when they expect you to start withdrawing your pension. Each individual scheme is different and yours may allow you to take your pension earlier or later than this date, but doing so could affect how much pension you subsequently receive.
Under normal rules the earliest age you can start drawing your pension is 55. If you draw your pension earlier than this it will be classed as an unauthorised payment and both you and your scheme administrator will pay extra tax. This includes withdrawals of lump sum payments to cash in or unlock your pension fund.
There is no set age by which you must start taking your pension, but your scheme provider may have their own scheme rules to adhere to.
A common misconception is that you need to have finished work and retired before starting to collect your pension. In fact, you can continue to work in a paid capacity while drawing your pension. For example, if your scheme allows it, you could take part of your pension and continue working, and then when you cease employment take the remainder of your pension.
The State Pension
The State Pension age is rising rapidly. For many years, the age at which you could claim your State Pension benefits was 65 for men and 60 for women. But huge jumps in life expectancy have seen costs shoot up for the Treasury, which is paying some pensioners for more years in retirement than they spent paying National Insurance as workers.
To find out more about when you can retire and to review the provisions you have in place to fund your retirement lifestyle, contact one of our team.