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
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.
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
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.
When Can I Claim My State Pension UK?
In the UK, the State Pension2 ages have been everchanging since April 2010. It’s currently 66 for men and women. However, there is talk of changing State Pension ages again. So you’ll have to be on the lookout for when this age changes if you’re planning to claim your State Pension.
When Can I Get My Pension Money?
From the age of 55, usually, you’ll be able to get your money from your pension, if you’re living in the UK. This is long before you are allowed to get your State Pension, which is currently set at the age of 66.
When Can I Claim My State Pension If I Was Born In 1954?
Well, this means that you’re 66 years old at the moment. This means that you can currently claim your State Pension. You meet the minimum required age perfectly. This age may change in the future, but at the moment it’s set at 66 for men and women.
When Can I Claim My Pension Early?
If you’re 55 years old, you’re allowed to claim your pension early. However, if you want to claim your State Pension, you’ll have to wait another 11 years to do so. However, your workplace pensions and personal pensions are available once you’re 55 years old.
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.