If you are aged 55 or over taking pension early may be possible if you have a relevant private or company UK pension. Taking pension early allows you to release the benefits held within your pension before your retirement date should the need arise.

You can take retirement benefits from your defined-contribution workplace or personal pension plan even if you continue to work.

Releasing your pension benefits early could reduce your income at retirement and therefore is only suitable for a limited number of people and circumstances.

New pension reforms came into effect on 6 April 2015 giving people over the age of 55 greater access to their pensions pension pot.

From age 55, whatever the size of your pension pot, you will be able to take it how you want, subject to your marginal rate of income tax in that year with 25% of your pot remaining tax-free.

There are various ways in which you might be able to take your pension income gradually for example if you have more than one pension or by using an income drawdown product

Pension Wise

Pension Wise is a new, free government service offering people over the age of 50 guidance to make informed decisions about their pension which are the best for their individual circumstances.

It offers guidance online or appointments over the telephone or face-to-face meetings where you can talk through these options, ensuring you have the information you need to make the right decision.

The service is impartial and free for you to use but it will not recommend companies or tell you how to use your pension pot or invest your money. This you should discuss with your Pension Scheme provider and/or your Financial Advisor.

State Pension

You cannot take your State Pension before you reach your State Pension age.

Remember that if you decide to stop work altogether and retire early you may receive a lower income at State Pension age if you haven’t paid enough qualifying years of National Insurance contributions to get the full State Pension.

If you've got gaps in your National Insurance contributions record you may be able to top up the gap by making one-off voluntary payments. If you're not working or getting National Insurance credits, you may also be able to make regular payments to protect your contributions record for the future.

For more information about toppng up National Insurance contributions (NIC), follow this link.

Retiring before age 55

It may be possible to draw your retirement benefits before age 55 if you are in poor health and unable to work. 

More information is available at:

Click here to download a Guide to Ill Health Retirement.

Equity Release Schemes

If you are retired or close to retirement (over 55) and own your own home by using an Equity Release Scheme you can release money tied up in your house to supplement your income, undertake home improvements or pay for long term care - more information on Equity release Schemes can be found at MAG- EQUITY RELEASE SCHEMES.

Early Release Schemes

Detailed information on Early Release Schemes, how to protect yourself and what to do if you are in any doubt is available from Financial Conduct Authority (FCA).

BEWARE of Early Release Schemes that that claim to be able to provide loans or release tax-free cash from your pension fund before you reach age 55.

Pension scams are on the increase in the UK. ‘One-off pension investments’, ‘pension loans’ or upfront cash offers are being used to part savers from their money.

Detailed information on pension scams is available at MAG - PENSION SCAMS.

More Information on Taking your Pension Early

Additional information on early retirement is available at the following links:

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