When can I take my pension benefits?

When can I take my pension benefits?

Understanding when and how you can start taking benefits from your pension pot is essential for planning your finances in later life. Because of the 2015 Pension Freedoms Act, you now have multiple options when accessing your pension. This means you can choose how best to take your benefits for your circumstances and plans for retirement. Here we will explore the rules surrounding drawing your pension, helping you understand the different options available to you.

What age can I start taking my pension?

In most circumstances you can start taking benefits from a personal pension at age 55. That doesn’t mean you have to start taking your pension at this age, you can choose to take your pension any time from 55 onwards. However, unless you turn 55 before 2028, you may have to wait a little longer to access your personal pension benefits, as this is when the UK government plans to increase the normal minimum age you can access workplace and personal pensions from 55 to 57.

Remember, if you access your pension at the earliest possible moment the smaller your fund will be because you will have spent less time paying into your pension.


Pension Benefits

Can I continue working?

Even if you do start taking your pension Benefits at age 55, that doesn’t mean you have to retire. You can take your pension benefits and keep working. However, if you have enough money to live on and don’t need to make use of benefits such as a lump sum payment, it might be a good idea to let your pension pot continue to grow for as long as possible before you start taking an income from it. Of course, this will depend entirely on your circumstances and retirement goals.

Can I take my pension before 55?

In normal circumstances the minimum age that you can start taking your retirement benefits from a workplace or personal pension is age 55. However, in some special circumstances it may be possible to access your pension pot earlier. You may be able to access your pension before 55 if one of the following applies to you and your circumstances:

  • You are unable to continue working due to ill health or you are terminally ill.
  • You are a member of a prescribed occupation. These are professions that mean your career has a shorter lifespan than most such as an athlete, footballer, model, or dancer. There is a full list of prescribed occupations here.
  • Certain occupational pension schemes such as the armed forces.

Unless any of the above applies to you, if you do decide to access your pension before 55 you will face very large charges and taxes. Currently you will be taxed at 55% of the full pension amount if you access your pension earlier than the minimum age.


Pension Benefits

What are the options for accessing my pension?

Once you turn 55, you can access your pension fund in a number of ways. However, once you start accessing your pension, you will usually have to decide on how the remaining fund will be treated going forward. This is why planning is essential before you start accessing your personal pension.

Under the Pension Freedom rules, you can take up to 25% of your pension as a tax-free lump sum once you turn 55. The remaining 75% will usually incur tax charges when you choose to access it.

The rest of your pension pot can be taken in multiple ways. Some of these include:

  • Taking all or some of it as cash.
  • Buying an annuity.
  • Continue investing your fund and separately, to take benefits as and when required or a regular income.

You don’t have to choose one option and stick with it for the rest of your retirement. You can choose an option when you first start accessing your pension and then change to another option later down the line to suit your life circumstances and retirement goals.

Thanks to the Pension Freedom Act of 2015, accessing your personal pension is now quite flexible, with many options to suit you. Managing your pension is made even easier with iSIPP. We give you 24/7 online access your personal account so that you can manage your investments and track your fund’s performance whenever and wherever you are. The choice freedom and flexibility offered by iSIPP and pension rules once you turn 55 means you can plan for your financial future in a way best suited to you. To find out more about the different pension options beyond 55, you can read more about this at the government’s free MoneyHelper service here.

To discover how iSIPP can help you, take a look at what we do here.




The content of this article is for general information purposes only and should not be construed as legal, financial or taxation advice. You should not rely on the information contained in this article as legal, financial or taxation advice. The content of this article is based on information currently available to us, and the current laws in force in the UK. The content does not take account of individual circumstances and may not reflect recent changes in the law since the date it was created. It is essential that detailed financial and tax advice should be sought in both jurisdictions and any legal advice, if required.

This notice cannot disclose all the risks associated with the products we make available to you. When making your own investment decisions it is important you understand that all investments can fall as well as rise in value and it is possible you may get back less than what you have paid in. You should also be satisfied that any investments you choose are suitable for you in the light of your circumstances and financial position. You should seek financial advice if you are not sure of what’s best for your situation.


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