Normally, you can start taking money from your pension at 55 if you want to – but you don’t have to take it then.
Your selected retirement age
With a personal pension, like The People’s Pension, you can normally start taking money out of your pension pot from the age of 55 if you want to (the government proposes to increase this to age 57 from 2028). And you don’t need to stop working to take your pension.
However, you also have a ‘selected retirement age’, which is likely to be later than 55. For your pot with The People’s Pension, your selected retirement age is based on your State Pension age by default – or you can change it through your Online Account if you want to.
It’s a good idea to review your selected retirement age and make sure it reflects roughly when you think you’re going to retire – because we use this age to calculate your expected pension shown in your annual statement.
Taking money out of your pension pot before your selected retirement age will affect how much you receive later.
You may be able to take money from your pension savings earlier than age 55 if you need to due to ill health.
If you’ve had to stop working because you’ve become physically or mentally incapable of continuing your job, you should get in touch with your pension provider to find out more about taking your pension savings early.
Your State Pension age and other types of pension
The State Pension age is the age at which you can receive your pension from the state. This has started to change from age 65 to 66 (depending on when you were born) for both men and women. The increase to 66 will be completed by October 2020.
In the future it will rise again to 67 and then 68.
Other types of ‘employer pension’ (ie including any pensions that you’ve built up with an employer throughout your career) normally work more-or-less the same way as your personal pension with The People’s Pension.
So you’ll normally be able to start taking an income or lump sum from 55 (the government proposes to increase this to age 57 from 2028). And you’ll also most likely have a selected retirement age, which is used to calculate your expected pension shown in your annual statement.
Common questions about when you can take your pension
Can you withdraw money from a private pension?
Yes – but not before age 55 (the government proposes to increase this to age 57 from 2028) – unless you have to retire early due to ill health.
Do you have to stop working to take money from your pension?
No – you can continue to work full time or part time and take cash from your pension pot. In fact, you can even continue to contribute to a pension while you’re working and top it up for years to come.
Do I have to take my pension when I retire?
No – you don’t have to take your pension at the ages set by your various pensions. You can keep your money where it is for as long as you want or until you need it.
What is my retirement age?
It’s up to you – the good news is that you can choose when you want to retire. You no longer have to retire when your employer tells you to, or even when you start taking your State Pension.
Our life expectancy calculator and future budget calculator might be helpful if you’re trying to work out when you can afford to retire – by showing you how long your pension will need to last, how much you’re likely to have when you come to retire, and how much you’ll need to live on in retirement.
Can I cash in a pension from an old employer?
Yes – any money you’ve built up in an employer pension is yours, even if you’ve since left that employer.
Once you reach age 55 (the government proposes to increase this to age 57 from 2028), you should be able to take your money out of your pension.
Or, you should be able to transfer it to your new pension provider before you reach 55 if you want to.
If you think you might have old pension pots that you’ve lost track of, you can track down your old providers, so you can get in touch with them – using the government’s pension tracing service
What happens if I pass away before I take my pension savings?
You can make sure your loved ones, or a favourite charity receives your retirement savings if you die before you take them. To do this you need to nominate your beneficiaries.
It’s simple to do. Just log in to your Online Account and fill in the details. And if your circumstances change, you can change your beneficiaries.
Be alert to pension scams
There are people out there with a variety of tricks up their sleeves to try and hook you into transferring your pension funds into bogus schemes.