Do I have to wait until I’m 55 to access my pension?

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Ask the expert at Smith & Pinching about the minimum retirement age - Credit: Getty Images/iStockphoto

I'm 50 and have been working for the same company since I was 17. I’ve built up a good pension and have paid off my mortgage, so I am thinking about retiring. I understand that there is a minimum retirement age of 55 but my pension scheme documents say I can retire at 50. Do I have to wait until I’m 55 to access my pension?

Phil Beck, Independent Financial Adviser with Smith & Pinching, Chartered Financial Planners

Phil Beck, Independent Financial Adviser with Smith & Pinching, Chartered Financial Planners - Credit: Smith & Pinching

Phil Beck of Smith & Pinching responds:

You are right that the minimum retirement age at the moment is 55. In fact, it is due to go up to 57 in 2028. This means that most people are not permitted to access their pension savings until that age, but there are exceptions.

Some of the exceptions relate to the individual’s special circumstances, including those who are seriously ill. The other main exception is for long-term members of schemes whose rules offered an earlier retirement age before legislation was introduced to bring in the minimum retirement age of 55.

With this in mind, I would need to look into your pension scheme and its rules further before giving a definitive answer. It is possible that you may be able to start drawing a pension before the official minimum retirement age if you have been a member of your scheme for some considerable time.

When pension rules changed in 2006, many schemes with a minimum pension age of under 55 were able to secure a protected minimum pension age for their members, provided certain conditions were met. We would need to check whether this is the case with your scheme.

Even if it is possible to start taking your pension before age 55, I strongly recommend that you take independent financial advice before making a final decision. It is important to be certain that your pension savings can provide you with the income and lifestyle you want throughout your retirement, with the earlier starting date. Life expectancy has been increasing steadily over the past couple of decades and the number of people who survive into their nineties and beyond has considerably increased. Essentially, the later you start taking your pension, the greater the income you can expect to enjoy when you do start.

The years immediately prior to retirement are hugely important from a planning perspective. An independent financial adviser can use lifetime cashflow planning tools to help you understand what your pension resources can achieve under different scenarios. I recommend you explore this fully now so that you can plan accordingly.

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Any opinions expressed do not constitute advice.

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