When you can take money from your pension pot will depend on your pension scheme’s rules, but it’s usually after you’re 55. You may be able to take money out before this age if either: you’re retiring early because of ill health.
What happens if you take your pension early?
The earlier you retire, the fewer years you can save into a pension, and the smaller your pension pot will be. It will also have to last you longer, so if you withdraw most of your pension early on in retirement, you could be at risk of a pension shortfall.
Can I take my stakeholder pension early?
Like all defined contribution pensions, you’re able to withdraw the funds in your stakeholder pension from the age of 55 (57 from 2028). You can take up to 25% as a tax-free lump sum and either withdraw the remaining 75%, use it to purchase an annuity, keep it invested via drawdown or delay drawing it altogether.
How much of my pension can I take tax free at 55?
25%
25% of your pension pot can be withdrawn tax-free, but you’ll need to pay income tax on the rest. You can choose whether to withdraw the full tax-free part in one go or over time. This is the most flexible option.
When is the best time to take my pension?
It’s not normally before 55. Contact your pension provider if you’re not sure when you can take your pension. You can take up to 25% of the money built up in your pension as a tax-free lump sum.
What happens to my pension if I retire early?
If he chose the lump sum route, then for every year of early retirement he cuts his tax free cash payment by £11,000, as well as his income. But ah, you might say – if Stuart retires at 55 he’ll be receiving his pension income for longer than if he retires later.
What does the Pension Advisory Service do for You?
The Pensions Advisory Service is an independent organisation that provides free information, advice and guidance about all types of pensions including state retirement pension, company, personal and stakeholder schemes. TPAS doesn’t provide financial or investment advice or recommend products.
When do you get a new state pension?
You’ll claim the new State Pension if you reach State Pension age on or after 6 April 2016. You might be able to increase the amount you get if you delay your pension. For advice about increasing your workplace or private pension, speak to a financial adviser.
