Retirement age 101: everything you need to know

Most pensions allow you to access money at the age of 60 or 66. This is the period in which many individuals consider retirement. However, you may ask yourself if it’s possible to retire and withdrawing money from your pension before the minimum age of 55. This is a long time before you will receive your State Pension, so it’s not possible to access it before you reach retirement age. But, if you have set up a personal or workplace pension, you can withdraw money if you pay a penalty fee. Nonetheless, keep in mind that the earlier you begin using money from your pension, the longer it will likely need to endure. As a result, it’s critical to consider how you handle your money to avoid running short earlier than necessary. 

Retirement age in the United Kingdom

In the United Kingdom, there is no longer a mandatory retirement age. Back in 2011, the legislation was altered to prevent businesses from forcing employees to retire at the age of 65. You have the option to work as much as you are willing to. On average, the retirement age for women is 63.6 and for men is 64.7. However, there are pension requirements, which determine when you may start receiving a pension, along with the State pension and any other pensions you may have.

Personal and workplace pension

Do you have a personal or workplace pension? Then the terms & conditions of your insurance will determine when you may access it. Verify with your provider to see if there are any fines for collecting your pension before the standard retirement age. Some plans have provisions that might result in you losing a ‘with-profits bonus’ or a ‘guaranteed annuity rate’. If you are a beneficiary of a workplace pension, you may need your employer’s or former employer’s permission to take money before the standard retirement age. If you are still employed by them, this is more likely. In rare cases, the trustees of the pension system may also be required. Is there a part of your membership that relates to contracting out of the State plan between April 6, 1978, and April 5, 1997? The scheme will then be required to pay a specific minimum amount. A Guaranteed Minimum Pension is what this is called (GMP). You might not be able to obtain your pension early if it isn’t at least equivalent to your projected GMP once you can start taking it. For further information about early retirement, contact your plan administrator.

Is it possible to retire before the age of 55?

Normally, you can’t collect money from the pension until you’re 55 years old. However, there are certain rare exceptions, such as if you have health problems. If you’re a professional athlete, for example, certain occupations enable you to retire sooner. Some pensions (mostly those started before April 6, 2006) have a regulated pension age of less than 55. If you believe this applies to you, it is better to contact your plan administrator as early as possible.

Tips to take into consideration

When considering an early retirement from your pension, keep the following points in mind.

  • Think carefully about your alternatives: before making any judgments on early pension release, figure out how much funds you have available and how long they will last you
  • If you believe you may be able to collect your pension prematurely for another reason rather than health issues, review the provisions of your plan and, in the first instance, contact your pension provider for any advice