When can I get my pension benefits? Active Members
This Quicknote is written for people who are active members of a defined benefit scheme.
Minimum pension age
Until 5th April 2010, the current minimum pension age from a registered pension scheme is age 50. On 6th April 2010, this rises to age 55 for everyone.
However, in terms of when you can draw your pension benefit depends upon the Rules of your pension scheme, which may have set your minimum age higher than this.
What YOU will be allowed to do and when will depend upon your Scheme Rules. It may also depend upon your Contract of Employment or such similar document.
Normal pension age
Benefits will usually be payable to you when you reach your scheme’s normal pension age.
Before 6th April 2006, pension schemes will have had written within their Rules a reference to Normal Retirement Date. This is important as it is the date at which you would normally have been expected to start to draw your pension benefits without the consent of the employer or the Trustees.
Even though legislation has been introduced to simplify pensions (most of which became effective from 6th April 2006) your Normal Retirement Date is the key date. The age you are at your Normal Retirement Date is commonly referred to as your Normal Retirement Age.
Before 6th April 2006, some specific pension schemes were permitted to have a retirement date lower than 50, reflecting the nature of their members’ occupations (such as some professional sportsmen). This needed the prior approval of (what was then) the Inland Revenue’s Pension Scheme Office, who produced the Occupational Pension Scheme Practice Notes which laid down the regulations of approved occupational pension schemes.
If YOU had this right to retire before age 50, and it was an ‘unqualified’ right – that is, it does not depend on you being able to get final approval from the Trustees of the scheme or your employer for instance – then you may be able to protect this right. If this applies to you contact the administrators of your scheme.
If you are unsure what your Normal Retirement Date is, contact your pension scheme or scheme administrators, who will be able to tell you.
Other phrases are commonly used such as Scheme Retirement Age or Scheme Pension Age which sound very much the same but can have different meanings for different pension schemes.
The definitions may vary slightly, or significantly, from scheme to scheme, so if you have more than one pension don’t assume the words will mean the same for each scheme.
Other circumstances when pension benefits may be taken
Depending upon the rules of your scheme (not all schemes allow these alternatives), you may also be entitled to receive benefits at other dates such as:
- Early retirement
- Retirement due to ill health
- Terminal Illness
- Late retirement (where you choose to work beyond normal pension age).
For information on any of these, you should write to your scheme administrator or Financial Adviser.
If none of the above are available to you, or they are available but don’t provide you with what you need to meet your requirements, and you need access to your pension, you may be able to transfer your benefits from your pension scheme into another registered pension scheme (e.g. a Personal Pension Plan). In this way you may be able to access your benefits from that scheme instead although this might lead to a significant reduction in your retirement provision. Your pension benefits are valuable, not only to you but to your dependants too and you should seek advice from a specialist Financial Adviser with experience in this area.
Flexible Retirement
From 6th April 2006, much more flexibility has been introduced by HMRC in respect of when and how pension benefits can be taken.
Flexible retirement means that you could continue to be employed and draw your pension too, if your Scheme Rules have been amended to take advantage of the new terms available under the Pensions Act 2004.
More and more employers are embracing ‘flexible retirement’ to accommodate those employees wishing to work beyond what would otherwise have been a standard Normal Retirement Date.
Of course, your pension scheme may have a provision within the Scheme Rules for ‘late retirement’ – usually associated where you elect to continue to work beyond your Normal Retirement Date. This should be checked too if it your intention to continue working beyond your Normal Retirement Date and you do not wish to draw your pension benefits at that time.
Summary
People seldom have identical pensions and you should avoid drawing comparisons with colleagues whose circumstances may at first appear the same but could emerge as having significant differences.
This is not an authoritative document. Seek professional advice from an appropriately experienced and qualified adviser.
When can I get my pension benefits v3.0 Active
Last updated 17/01/2007
