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Phone 0800 1223 170

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Lines open: Mon - Fri 9am- 5:30pm

Phone 0800 1223 170

to make a telephone application

Lines open: Mon - Fri 9am- 5:30pm

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Copyright 2016 by Pension Tracing Service ® 

This service is not affiliated with the Department of Work and Pensions or any government body. The Pension Tracing Service does not offer financial advice to our clients. However we can allocate you an Authorised and Regulated Pension Specialist. 

Copyright 2016 by Pension Tracing Service ® 

This service is not affiliated with the Department of Work and Pensions or any government body. The Pension Tracing Service does not offer financial advice to our clients. However we can allocate you an Authorised and Regulated Pension Specialist. 

Early retirement

Early retirement

Some people may wish to retire early by choice, or have to stop work due to ill-health or redundancy. This is known as early retirement, and can have an influence on both State Pensions and Personal Pensions. It’s important to know how retiring early could affect how much money you have to live on.

How does early retirement affect the state pension?

Retiring before State Pension Age will mean that a pensioner will not receive their State Pension instantly. They may also get less when they reach State Pension Age than if they had continued in employment. To get a State Pension, one needs to work a certain number of qualifying years during which they have paid National Insurance Contributions. Early retirement means fewer qualifying years.

Boosting National Insurance Contributions

Some people may wish to retire early by choice, or have to stop work due to ill-health or redundancy. This is known as early retirement, and can have an influence on both State Pensions and Personal Pensions. It’s important to know how retiring early could affect how much money you have to live on.

How does early retirement affect the state pension?

Retiring before State Pension Age will mean that a pensioner will not receive their State Pension instantly. They may also get less when they reach State Pension Age than if they had continued in employment. To get a State Pension, one needs to work a certain number of qualifying years during which they have paid National Insurance Contributions. Early retirement means fewer qualifying years.

Boosting National Insurance Contributions

Help me

Help me

my pensions

my pensions

Paying voluntary NICs (for those under 60)

NIC credits for men over 60 aged before 5th October 1954

Casual work to add to NIC record.

Paying voluntary NICs (for those under 60)

NIC credits for men over 60 aged before 5th October 1954

Casual work to add to NIC record.

Taking early retirement needn’t impact on your state pension if you boost your National Insurance contributions. There are a number of ways in which to boost NICs. These include:

Early retirement and personal or company pensions

The details of company, personal or stakeholder pension schemes will outline when the pension scheme holder can retire without penalty. Many pension schemes make provision for early retirement on the grounds of ill-health. Your pension company should be able to highlight how early retirement will affect your pension.

Early retirement and personal pensions

Taking early retirement needn’t impact on your state pension if you boost your National Insurance contributions. There are a number of ways in which to boost NICs. These include:

Early retirement and personal or company pensions

The details of company, personal or stakeholder pension schemes will outline when the pension scheme holder can retire without penalty. Many pension schemes make provision for early retirement on the grounds of ill-health. Your pension company should be able to highlight how early retirement will affect your pension.

Early retirement and personal pensions

Your pension fund will be smaller if you pay in for fewer years

Your pension fund will provide you with an income over a longer period, therefore the pension will be smaller

Your pension fund will be smaller if you pay in for fewer years

Your pension fund will provide you with an income over a longer period, therefore the pension will be smaller

Being a member of a personal pension, occupational pension, or stakeholder pension will be affected by early retirement. If you wish to retire early, it is worth bearing in mind that:

Early retirement and final salary pension schemes

Final salary pension schemes are becoming increasingly rare, with many companies closing their schemes to new members. However, many UK employees have some form of final salary scheme. This type of pension calculates retirement income based on a small fraction of salary, multiplied by the number of years as a member of the scheme. Both of these will be impacted on by early retirement. Some companies may block their employees from  taking a pension before normal retirement age. However, ill-health may have an impact on this, and provide for an enhanced pension in the case of ill health.

Being a member of a personal pension, occupational pension, or stakeholder pension will be affected by early retirement. If you wish to retire early, it is worth bearing in mind that:

Early retirement and final salary pension schemes

Final salary pension schemes are becoming increasingly rare, with many companies closing their schemes to new members. However, many UK employees have some form of final salary scheme. This type of pension calculates retirement income based on a small fraction of salary, multiplied by the number of years as a member of the scheme. Both of these will be impacted on by early retirement. Some companies may block their employees from  taking a pension before normal retirement age. However, ill-health may have an impact on this, and provide for an enhanced pension in the case of ill health.