To think you shouldn't be able to access your pension at 55 (soon to be 57)

[movemamamove]

We keep hearing about the ever-increasing number of adults who are not in work or actively looking and the impact this has on the economy, and pension age has been increased to 66 and will be 67, so why is it that people can draw down on their pension at 55 rising to 57 in 2028? Surely this encourages people to retire earlier and step out of the workplace far earlier than they should be & it's probably only the wealthiest anyway which doesn't seem fair.

DH & I have been focusing on 55 as the first stage in our retirement. We planned to take a step back from our careers, draw down on one of our pensions to travl & hopefully live abroad for a few years. If/when we do re-enter the workplace here, it would be part time & likely far less senior roles so earning less & spending less. If I couldn't access this money until 60 or even pensionable age, we'd just carry on working until then as the only way we can fund our intended travels is drawing down from a pension fund - we invested heavily into very good workplace pensions so have minimal savings but excellent pensions.

Anyone else have a view on this or maybe an explanation why this early draw-down option hasn't been increased bar this latest 2 year extension? Or perhaps explain the reason why this is a good idea?
AIBU to think it should be extended?
YABU - leave well alone. If you can afford to take a step back & access your own money, why not?
YANBU -agree and it should be increased to 60+ to stop people retiring so early.

I think it is great if people retire early as it leaves jobs for younger people. Given there seems to be a shortage if job vacancies in some areas, and many workplaces are making people redundant. I can't see the disadvantage.

Spot on, I don't think some people realise that both national charities such as the National Trust and local charities such as playgroups rely so heavily on the retired 55-70 demographic doing unpaid work. If people couldn't draw on their private pensions until 67 we'd lose all this.

I retired at 58, came back during covid to help out (healthcare) and retired properly at 61.
My ddad passed away aged 58, dm passed away aged 63 and dsis passed away aged 60. Damn right I retired early. I wanted some retirement!

Surely it’s better for the economy if they do retire. Someone else will do the job they were slimy, and pay tax and spend money. Meantime the retired person pays tax on their pension (or part of it) and also spends money. Benefitting the economy more

People should be allowed to retire whenever they want if they have accumulated enough to be able to provide for themselves for the rest of their lives.

Clearly the government thinks the same if it's rising to 57. The nature of the work you're doing matters hugely- NHS 'special class' who are able to take some pension at 55 is for those with very physical jobs. I think the vast majority of those who take pensions at this age do other work too.

As my pension savings from my volatile self -employed income came without employee contributions and often at the cost of other expenditure, I would say that when and how I take them are entirely my concern. I am 60 and haven’t touched it yet but I have had some very lean years and it has been an insurance policy for me.

When I started work at 17, I was able to claim my pension at 60, that’s now increased to 67.
thankfully I’ve always paid into a pension, and fully intend to retire around 60, on my private pension instead.
after 43 years of working , I’ll be ready to retire.
Government planned to make me work longer, but they can’t make me, treacherous bastards the lot of them.

Taking early retirement aged 56 enabled me to care for my mum who had vascular dementia. She died before I was 60.

I think YABU and I could never afford to retire at 55, or 57 at that matter.

People should be allowed to do what is best for them.

I don't know how old you are @movemamamove but what many younger people don't understand is that by the time you've worked for 35 or more years, done the family / home thing, hit peri/meno etc you are knackered, physically and mentally. Throw caring for aging family members into the mix (I know that's a choice), being able to step down is not always voluntary, it's a must do.

When I started out in the pensions industry, the age at which you could take your pension had been set by the Finance Act 1970 as age 50.

Taking it at age 55 was an increase.

Im a bit confused - I want to take up to 25% of my pension to pay off my mortgage at 55. I still plan to work after that. That’s ok isn’t it I don’t get taxed on the first 25%?

op good to have this conversation. It’s probably helping lots of us

Check with your scheme as the 25% lump sum is tax free however some schemes don’t allow you to just take the lump sum, you have to take your monthly pension as well.

I spoke to Pension Wise who were really helpful and looked at my options across various former company pensions

the other thing to consider is that it's more common now for 'proper work' to commence in your early to mid-20s. one of my extended family is due to graduate (all being well!) next year. he took a gap year after leaving school and is planning a masters so he'll be 24 before he starts his career, which is knowledge based rather than manual work.

at the same age i'd already been working full time for six years. i'm lucky because although my initial jobs were manually hard - cleaning and then factory and then care work - i got into office work, and worked my way up from there. all being well health-wise, i should be able to keep going into my 60s.

but someone my age who has done physical work all their life is far more likely to need to retire early because of the toll on their body. the physical ability to keep working at age 55 between the average person who started a desk role at age 24, against the average person who started in a warehouse at age 18, is massive.

I am 58 and just retired after 30 plus years of teaching on ill health grounds.

I will be living on my pension for another 9 years until I get the state old age pension (that was promised me at 60 when I began work).

I cannot continue working any longer and don't wish to. My health is now really poor. I would be claiming benefits if I could not access my pension. How is that better for society?

If I take my pension early (ie the one I contribute to - not the state pension) I lose 5% each year.

So if I take it say 3 years early it's 3x5=15% less per month than if I waited.

So it's not like I get given the full thing.

Having the choice to take it early is helpful for those with health issues, carers for their parents or grandchildren etc. Why not!?

Good for you. You’ve done well to stick it out for all those years. Enjoy your retirement. You’ve certainly earnt it

I think it would be reasonable to be able to access your pension pot at 60. That's still 7 years before state pension age.

Late mid 50 both FIL and DH in skilled jobs were made redundant. Dad never manged to get anything else hampered by elder care and ill health and drawing on part of pension then later inheritance till state pension kicked in meant my parents lived okay with no extra state help.

FIL took a lump sum from one of his and redundancy package and then started up his own business with that money with couple of others in same boat - ran it and worked ft till he was 68 and had minor heart attack.

I retired from the CS at 50 after working full time for 33 years.
Why wouldn't I? I could afford to live without working or claiming benefits, if I needed to be replaced a younger person could take the job I vacated.

I honestly think this is just a stealth brag.

I planned to retire at 60, and sacrificed at 10% of my income every month so I could build up a decent pension. I am self employed but had an NHS contract that included a very good pension. I also owned my own business. I sold my business at 54 and used the proceeds so I could reduce my hours. I then took my pension at 59, mainly for health reasons. I still work one day a week which effectively doubles my pension and we have substantial savings.
All this was planned from an early age, and really I’m just claiming back the money I paid in. I have a small pension that will kick in when I stop work and take me up to state pension age. Again I have fully contributed to the state pension.

So many people bury their heads in the sand re pensions, wanting to live in the here and now, which is fine but then there is no point in moaning about it when you reach your 60s and work becomes hard work.

It’s all about cutting your cloth to your needs. If saving for a pension means you miss out on new cars, a bigger house etc so be it. When I first started work I couldn’t afford brand new furniture or the latest technology. I still look for bargains and buy quality that lasts. I love charity shop finds and much of our furniture is over 20 yrs old. I have just replaced my dishwasher that was 20yrs old. Hopefully the new one will last as long.
We are replacing one of the cars this week, again we will own it outright so no extra monthly payments. It will probably last us 5-7 yrs, by which time we will have saved enough to replace it. Although with the death of fossil fuel cars I will not be buying an electric car outright unless technology improves.

DH and I are very comfortable. We have never had an expensive lifestyle. But after working hard we want to enjoy what life we have left. Both of us have had serious health issues so would struggle to work full time, in fact DH had a stroke so working is not possible at the moment. I don’t know what we would have done without the financial cushion we prepared. I suppose we would have ended up living off benefits.

I have recently lost my sister ( 56) who never got to enjoy her pension. My mum died at 55 but my grandmother lived until her 80s so we have no idea what our future holds. Life throws a wide ball sometimes and being prepared means you have choices when it gets tough.

Also a primary teacher and you're deluded if you think teaching is a more volatile environment than a prison

DH and I have both retired early, I was 55 and DH was 56. A woman in her early 30’s had my job and jolly pleased she was as well. DH accepted severance so has not been replaced at the moment. We pay tax on our pensions.

It’s just a bit odd how you are criticising yourself.

The one issue is the loss of knowledge and experience though I would say some are jaded and maybe some youthful enthusiasm is needed sometimes.