When can I retire? - Retirement - Guides | moneyfacts.co.uk


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When can I retire?

Category: Retirement
Author: Tim Leonard
Updated: 11/12/2018

This is probably a question that's been on many people's minds for a number of years! Of course, we can't tell you when you should retire (that will depend on your personal circumstances), but we can tell you when you can start taking your state and personal pensions.

One thing to say before we go on: a lot of the information displayed here is based on current and planned changes to the age at which you can take your pension. Therefore, you should keep an eye on developments to make sure you don't have to work longer than you were expecting to!

State Pension

If you are a man, you can start to receive your State Pension from the age of 65. And from 6 November 2018, women also get their State Pension at 65. This is the first time all newly-eligible people of both sexes quality for their pension at the same age.

Between December 2018 and April 2020

The State Pension age for both men and women will gradually be increased to 66 by October 2020, depending on your exact date of birth. Calculate your State Pension age here.

In the future…

The State Pension Age will increase from 66 to 67 between 2026 and 2028.

The Government has also proposed to increase the age at which you can claim your State Pension to 68 between 2037 and 2039. The previous timetable for this was 2046.

You don't have to claim your State Pension as soon as you are eligible to take it. If you choose to defer when you receive your State Pension, you could receive an increased weekly pension. The pension would increase by 1% for every nine weeks you defer receiving it. So, if you deferred for a whole year, you would increase your state pension by nearly 5.8%.

Personal Pension

There is now no maximum age by which you need to take an income from your pension pot (previously it was 75). But if you continue to pay in to your pension after age 75, you will no longer get any tax relief on your contributions. You can take your personal pension regardless of whether you are receiving the State Pension and/or are still working.

Although you can currently take your pension at any point from the age of 55, you should bear in mind that your pension provider may manage your pension by taking into account when they expect you to retire. Usually, sometime up to a decade before you retire your pension provider will move your pot from riskier investments to safer ones, in order to protect the gains you will have made over your lifetime. This is sometimes called 'lifestyling'; it applies to all stakeholder pensions and some personal pensions.

The Government has said that it intends to increase the minimum age at which you can access personal pensions to 57 in 2028, so that it is always 10 years earlier than when the state pension can be paid.

However, if you're not planning to retire until later, it may be an idea to tell your pension provider so that you can continue to benefit from higher potential returns for longer. Although this, of course, comes with the higher risk of your pension fund losing value, if an investment performs badly.

When do I have to take an annuity?

There is no obligation to buy an annuity at any time. You can choose not to purchase an annuity and can keep your pension invested, taking a part of it each year as an income instead, or just living off the investment growth. You can find out more about annuities by reading our guide on the subject.

What next?

Read more about annuities: How to choose the best annuity

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.