When to Claim Your Pension

Wondering When You Can Claim Your Pension? Discover the Truth Now

While Claiming Your Pension May Sound Like a Difficult Feat, It Can Be a Breeze With the Right Guidance. Fear Not: We're Here to Be Your Guide.

Claiming Your Pension Is Easy

Claiming Your Pension Is Easy

Claiming your pension might sound like a big job, but it’s straightforward.

Here are a few things you’ll need to know:

Your age determines when you’ll get access to your pension. The type of pension is another determining factor. You can access your workplace pensions1 as well as your pensions when you’re in your mid-late 50s. However, you’ll only gain access to your State Pension when you’re in your mid-late 60s.

State Pension Explained

The State Pension regularly pays out. The money you get comes from the government when you reach the eligible age of 66 and 67 (from the year 2028).

A new State Pension system was set in place on the 6th of April, 2016.

What does this mean for you?

Well, the amount of money you’ll receive depends on your age (whether you’ve reached your State Pension yet or not). Paying National Insurance Contributions will qualify you for the new State Pension if you’ve been doing so for at least 10 years. If you’ve paid National Insurance Contributions for 35 years, you’ll receive £9,110.40 annually.

On gov.uk is a tool that lets you check your State Pension age, as well as your National Insurance Contribution record if you want to make sure you have adequate years to qualify.

Workplace Pension Explained

Workplace Pension Explained

Defined contribution pensions, workplace pensions, and personal pensions all work similarly. These are pensions that have either been personally set up your employer might have set it up for you. They all involve you paying in regular contributions throughout your employment. The pensions’ value is determined by how much you’ve paid into them and how well/poorly your investments have increased or decreased.

Let’s have a close look:

You can withdraw from this pension pot when you’re 55. The age might change to 57 by the year 2028. There are so many pension plans for accessing the funds that are in your workplace pension. You can withdraw funds as a lump sum from your retirement or use that money to invest via drawdown. Purchasing an annuity is also an option you can consider. Some people keep their retirement as is. Few people retire at the young age of 55. Some can live without a stable salary for a few years.

A defined benefit workplace pension plan has different requirements.

You’re probably asking why:

Because your pension’s value is determined by the period you worked for, as well as your salary. At 55 you can withdraw up to 25% of either tax-free. However, some plans require you to be at a specific age to access the rest of your pension. This age should be pre-agreed with your pension provider.

What’s Early Retirement?

You can end your career life at any stage. In the UK, there are no laws to prevent you from doing that. Your retirement date is also your own choice. However, before you retire, you’ll need to make sure that you’ll have sufficient funds to support yourself when you stop working and enter into retirement.

If you plan on withdrawing from your State Pension, check that you paid adequate National Insurance Contributions during your employment years. This way, you’ll get the most out of your retirement income.

Fun fact:

A pension calculator2 is your best friend right now. It’ll make retirement planning simpler. The calculator can tell you when you can afford to retire and if you should work for a few more years to grow your pension pot.

Early Pension Release In Simple Terms

Early Pension Release In Simple Terms

Let me show you how

You can only withdraw money from your pension if you’re 55, ill, or meet specific requirements set out by your provider. Otherwise, you can’t release your pension early. To stop people from withdrawing their retirement early, HMRC asks for a substantial tax fee on every early pension withdrawal to deter people too soon.

You’ll be able to track the performance of your investment online as well. Accessing your funds is also done in a few easy steps. Just have your bank details in order, and you’ll be paid within 7-10 working days. Easy as that!

The Pensions Advisory Service

The Pensions Advisory Service is a free advisory service for people with workplace pensions, occupational pensions, or personal pensions. It can help you make the right decision about when to claim your pension and how much income it will provide in retirement.

A Quick Side Note:

Social Security is a matter that’ll come up when you’re trying to claim your State Pension. What does it entail? You can only claim your State Pension if you have paid NIC or you have been given UK National Insurance contributions (NIC). What are NICs? These contributions are the UK’s social security contributions.

Common Questions

When Can I Claim My State Pension UK?

When Can I Get My Pension Money?

When Can I Claim My State Pension If I Was Born In 1954?

When Can I Claim My Pension Early?

Conclusively

What great news! You can get your pension money from a young age if you need to. The only pension you’ll need to wait for is your State Pension.

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Editorial Note: This content has been independently collected by the EveryInvestor advisor team and is offered on a non-advised basis. EveryInvestor may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.
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