When can I retire? Retirement age in the UK for men and women explained as state pension age increases

As the new state pension eligibility age comes into effect, many have been left wondering what the change will mean for them

Tuesday, 6th October 2020, 2:56 pm
When can I retire? Retirement age in the UK for men and women explained as state pension age increases (Photo: Shutterstock)
When can I retire? Retirement age in the UK for men and women explained as state pension age increases (Photo: Shutterstock)

As of today (6 October) anyone born after 5 October 1954 won’t be able to claim their pension until at least age 66.

For women, the eligible state pension age rose from 60 to 65 between 2010, and has now risen again for the first time since, whereas this year’s increase will be the first for men.

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There are further changes scheduled, which will eventually see the eligible state pension age increase to 68 by 2037.

But these changes don’t affect the age at which you have to retire.

When can I retire?

Technically, you can retire at whatever age you like, whether that’s before or after the eligibility age for a state pension.

Of course, if you retire before the eligibility age you won’t be able to access your full state pension, but for those with other financial means, early retirement is an option.

Is retirement mandatory?

While it used to be common for firms to enforce a mandatory retirement age of 65, which lined up with state pension eligibility age for men, this is no longer the case, after being phased out in 2011.

There’s no requirement to retire at the eligible state pension age, or at any other age, so long as your employer wants to keep you on.

There are some industries where employers can enforce a mandatory retirement age, but there has to be other reasons, like safety and fitness, and workers can’t be forced to retire purely based on their age.

However, if you want to be able to access the full state pension whenever you come to retire, you’ll need to make sure you’ve made the necessary National Insurance contributions.

This means you’ll need to have made at least 10 years’ worth of contributions to get any state pension, and 35 years’ to get the full state pension.

What about pensions?

To access your state pension, you’ll have to wait until you’re eligible, in line with the updated rules.

However, if you’re in a defined contribution pension, you’ll likely be able to access some of the full amount when you turn 55.

Like the eligible age for state pension, this minimum wage will increase, to 57 in 2028.

This doesn’t apply in all cases, as some schemes will have a ‘selected’ or ‘normal’ retirement age, meaning you’ll probably have to pay a penalty if you access your plan before that date.

There are exceptions, for instance if you fall seriously ill prior to this age, but you should check with your provider to confirm if you’re unsure.

Some people will have final salary pension schemes, also known as ‘defined benefit’ pensions.

With these schemes you’ll receive an amount of your salary depending on how long you’ve paid into the scheme, and you’ll be able to access the money whenever the individual scheme allows, though typically at 60 or 65.