Early retirement
You can choose to retire early from age 55. If you choose to retire before your normal pension age your benefits are likely to be reduced because they will be paid earlier and for longer.
Please note, the government has announced that the normal minimum pension age will increase to age 57 from 6 April 2028.
How much your benefits are reduced depends on how early you retire.
|
Years early |
Pension reduction (%) |
Retirement lump sum reduction (%) |
|---|---|---|
|
Years early 0 |
Years early 0 |
Pension reduction (%) 0 |
|
Years early 1 |
Years early 4.9 |
Pension reduction (%) 1.7 |
|
Years early 2 |
Years early 9.3 |
Pension reduction (%) 3.3 |
|
Years early 3 |
Years early 13.5 |
Pension reduction (%) 4.9 |
|
Years early 4 |
Years early 17.4 |
Pension reduction (%) 6.5 |
|
Years early 5 |
Years early 20.9 |
Pension reduction (%) 8.1 |
|
Years early 6 |
Years early 24.3 |
Pension reduction (%) 9.6 |
|
Years early 7 |
Years early 27.4 |
Pension reduction (%) 11.1 |
|
Years early 8 |
Years early 30.3 |
Pension reduction (%) 12.6 |
|
Years early 9 |
Years early 33.0 |
Pension reduction (%) 14.1 |
|
Years early 10 |
Years early 35.6 |
Pension reduction (%) 15.5 |
|
Years early 11 |
Years early 39.5 |
Pension reduction (%) N/A |
|
Years early 12 |
Years early 41.8 |
Pension reduction (%) N/A |
|
Years early 13 |
Years early 43.9 |
Pension reduction (%) N/A |
Please contact us if you want to talk about your individual situation.
Example
Stan is sixty-four when he decides to retire. His normal pension age is age 65.
His benefits are:
- Pension, £4,000 a year
- Lump sum, £11,500
As he is retiring 1 year early, his benefits are reduced.
The benefits he will actually be paid are:
- Pension, £3,804 a year, a 4.9% reduction
- Lump sum, £11,304.50, a 1.7% reduction
