At a glance
• The Government is currently increasing the State Pension age, which means that depending on when you were born, you could receive this benefit from the age of 65, 68 or somewhere in-between
• There is no age restriction on when you need to take your personal pension (other than a minimum age that is currently set at 55), allowing you to retire when it suits you best
• Make sure you have enough funds and know what you need to do to get the most out of your retirement before you consider taking advantage of the pension freedoms
When to retire is probably a conundrum that's on many people's minds. 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!
Currently, you can start to receive your State Pension from the age of 65. However, the State Pension age for both men and women is gradually increasing between December 2018 and October 2020 to the age of 66, depending on your exact date of birth.
Additionally, it’s expected to increase further 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. These dates may change again.
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 it. So, if you deferred for a whole year, you would increase your State Pension by nearly 5.8%.
There is no maximum age by which you need to take an income from your pension pot (it used to be 75). However, if you continue to pay into your pension after the age of 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. Up to a decade before you retire your pension provider may start to 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', and tends to apply to all stakeholder pensions as well as some personal pensions.
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. This would of course come with the higher risk of your pension fund losing value, if an investment performs badly.
Should I 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. However, this is the riskier option, with annuities offering retirees the security that they won’t run out of money. You can find out more about annuities by reading our guide on the subject.
Keep in mind that the Government has said 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.
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.