Personal Pension Age

Thanks to the pension freedoms act of 2015, many of us can now access our pension benefits with ease and flexibility. But what age can you access your personal pension, would you incur any charges if you took it early, and is the age set to increase?

In this guide we answer all these questions and more.

Click a link from the contents below, or read on for a comprehensive overview:

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What age can I take my personal pension?

Currently, you can open your personal pot and take an income from age 55 or older. You can still be working full-time or part-time once you take your pension. If you plan to take your pension earlier than 55, you’ll face a withdrawal tax charge of 55%, although there are some circumstances in which you can access your pension earlier.

After 55, you can withdraw a 25% tax-free lump sum from this total pension amount, otherwise known as a ‘pension commencement lump sum’.

If you’re wondering what age you can afford to retire, a pensions advisor can help you work it out. The pension experts we work with also offer a free pensions review so if you are still saving towards your retirement you can find out how your investments are faring and whether there are any other preparations you could take now to ensure a comfortable retirement when the time comes.

What age can I start drawing down a pension?

You may be able to get a variable income through a fixed or flexi-access pension drawdown from the age of 55, depending on your scheme.

 What’s the minimum age I can access my personal pension?

The normal minimum age you can access your personal pension is 55 – this increased from 50 in April 2010. However, you may have the right to access your pension pot earlier if you suffer from a health condition, or if you have a protected pension age. This is where an employment contract could entitle someone to retire early.

Bear in mind that the earlier you take out your pension pot, the smaller your pension fund will be, as you’ll have spent less time paying into it.

Personal pension at 50

You may be able to access your pension before 55 under certain circumstances. A protected pension age applies to members with ‘older-style contracts’ who before 6 April 2006 had a right to take their pension benefits at an earlier age. Any payment taken before age 55 will be treated as an unauthorised payment if neither ill health nor protect pension age applies to you.

You may be able to take your personal pension before 55 if one of the following applies to you:

  • If you can no longer work due to ill health
  •  If you have a prescribed occupation, for example athletes, models, members of the Reserve Forces, dancers, footballers, and many more
  • Certain schemes listed in the Registered Pension Scheme, such as the Armed Forces Pension Scheme.

If any of the above applies, you won’t see a reduction in your lifetime allowance if you take your pension benefits at a protected pension age between 50 and 55.

If you are thinking of taking your pension before the age of 55, you could face hefty charges and tax at 55% on the full pension amount. Before you take any action talk to one of the pension experts we work with. All the advisors we work with are regulated by The Financial Conduct Authority so you will be dealing with a highly trained person that adheres to strict rules of conduct.

Is the minimum personal pension age set to increase?

Yes, the minimum age you can access your personal pension is set to rise to 57 by 2028. The state pension age reached 66 in October 2020, and will rise to 67 between 2026 to 2028.

Unfortunately, it’s likely that both personal and state pension ages will rise in the years to come. To ensure that you’re comfortably set up for the future, speak with an advisor. They can recommend the best pension schemes that nurture your funds and aim to set you up for your retirement. Make an enquiry to find out more.

Is there a minimum age I can start a pension?

You can set one up after you turn 16, or after you receive your National Insurance number. If you have a child under 16, you can set up a pension on their behalf and pay up to £2,880 per year into the scheme. For more information about setting up a pension for you or your child, make an enquiry.

Is there a maximum retirement age?

For personal pensions such as stakeholder pensions and SIPPs, you can take out your 25% tax-free lump sum and draw down an income at any age, even after 75.

However, bear in mind that if you still haven’t taken your pension before 75, it will be classed as ‘unused funds’, and will be tested against any remaining ‘lifetime allowance’, which is the limit of pension funds you can accumulate during your lifetime before a tax charge applies. Currently, the limit is set to just above £1m.

Both defined benefit and defined contribution schemes contribute towards this lifetime allowance, and if you don’t have enough allowance left, any lump sum amounts taken before 75 could be taxed at 55%. For more information or to see how the lifetime allowance could affect you, speak with an advisor.

What happens if I delay my pension pot?

If you have enough to live on and can delay taking your pension, your pot can continue to grow tax-free funds. However, you may need to check with your pension provider if you wish to delay your pension after 75. If they won’t budge, you may need to find a more accommodating provider.

Speak to an expert

The right personal pension scheme could build up a decent enough fund for you to retire at the age you want. But which scheme will perform the best for you, and how do you go about finding the right one?

The pensions experts we work with have ‘whole-of-market’ access, meaning they can find pension schemes which match your needs and wants. Call 0808 189 0463 or make an enquiry for a free, no obligation chat and we’ll match you with an expert who will help you review your pension requirements, taking all your circumstances into account.

We can arrange a free pension review for you today

70% of customers who have a pension review find a better deal

We can arrange a free pension review for you today

70% of customers who have a pension review find a better deal

Book a free, no-obligation pension review today