Which? How to access your pension
May 15, 2025
Join Jenny Ross and Tom Selby, Director of Public Policy at AJ Bell, as they dive into the intricate world of pensions. They break down the differences between defined contribution and defined benefit schemes, making it easier to choose the right route for your retirement. Tom highlights the flexibility of pension drawdown and its risks, while discussing the shift from annuities since 2015. They address the crucial need for accessible financial guidance and preview the upcoming pensions dashboard, promising to revolutionize how we manage our retirement savings.
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Pension Access Age Changes
- You can access defined contribution pensions from age 55, but this minimum age will rise to 57 in 2028.
- Defined benefit pensions are accessed at the scheme's normal retirement age, usually the state pension age.
Be Cautious Accessing Early
- If you access your pension early, manage withdrawals carefully to make the fund last potentially 40+ years.
- Understand tax implications, like triggering the money purchase annual allowance, which limits future pension contributions.
Annuity Income Depends on Age and Health
- Annuities provide a guaranteed income for life by swapping your pension pot at retirement.
- Higher annuity rates are offered to older individuals or those with serious health conditions.