Early Retirement
Under current rules you can take early retirement from the age of 50. If you're a member of an occupational pension scheme, when you take early retirement will be set out in the scheme's rules. Each scheme sets its own rules within the framework of what is permitted by the Inland Revenue.
For benefits to be paid early under an occupational scheme you must actually leave the employment to which the pension scheme relates. There may be other conditions as well, such as the requirement for the employer's consent.
The rules governing personal and stakeholder pension schemes differ from those which apply to company schemes. You do not have to retire from your employment to be able to draw on the benefits and you may draw the benefits anytime after age 50 but you must have done so by the time you reach age 75.
Obviously, if you take early retirement, the level of pension you will receive is going to be affected. The earlier you draw a pension from a personal or stakeholder pension scheme, the lower the income is likely to be. Similarly, most occupational schemes will reduce the pension earned to the date of early retirement to allow for the fact that it is now going to be paid earlier and for a longer period.
If you take early retirement you will not be eligible for state pension until you reach the state pension age, although you will not have to pay National Insurance contributions unless you start work again before state pension age. However, you may need to pay extra contributions to make sure you get your full Basic State Pension
Under current rules sports professionals are allowed to draw their pensions at an earlier date due to a naturally shorter career life. For example, athletes, badminton players, boxers, cyclists, footballers, National Hunt jockeys, models, Rugby League players, downhill skiers, squash players, table tennis players, tennis players and wrestlers may all retire at 35. Cricketers can pack it in at 40 but circus animal trainers and croupiers have to keep going until they are 50. A clutch of other careers also qualify for earlier retirement ages. However, all these limits are to be abolished under the government proposals to simplify the pensions regime.
The new rules, due to take effect in April 2006, stipulate the minimum age for early retirement for everybody will rise from 50 to 55 by 2010. Thereafter nobody will be allowed to take a pension before the age of 55.