Can I take my pension at 55 and still work?

Can I take my pension at 55 and still work? Yes, you can access most private pensions from 55 while you carry on working, part time or full time.

This article covers what you can take, how it is taxed, and what to consider before you start drawing on your pension while still employed.

Why is age 55 a milestone

At Regulated Advice, most of our clients come to us between the ages of 55 and 64, because turning 55 is a milestone in most people's life as they enter the retirement phase. It is, of course, the age you can gain access to some pension schemes.

Many people cannot stop working at 55, but knowing they could draw on a pension changes how they think about their finances. This is often when people first ask for a full pension review and to look at retirement options, even if they plan to keep working for years yet.

A look at 260 of our recent client enquiries who we booked an appointment for at Regulated Advice shows this pattern clearly.

Age band	Share of clients
Under 40	8.1%
40 to 49	9.2%
50 to 54	9.2%
55 to 59	19.2%
60 to 64	22.3%
65 to 69	18.5%
70 to 74	5.8%
75 and over	7.7%

 

The 60 to 64 age band is our single biggest group, followed closely by 55 to 59 and 65 to 69. Together, ages 55 to 69 make up 6 in 10 of all the enquiries we receive.

In the UK, you can start drawing most personal and workplace pensions from age 55, rising to 57 from 6 April 2028. There is no rule linking pension access to your employment status, so working part time changes nothing.

Can i take my pension at 55 and still work

You can take a tax-free lump sum, usually up to 25% of the pot, capped at £268,275. You can also draw a taxable income through drawdown, or take smaller lump sums as needed, all while still employed.

What happens to your tax if you keep working

Your pension income beyond the tax-free portion adds to your salary for tax purposes. This can push some people into a higher tax bracket, so timing withdrawals matters.

The money purchase annual allowance

Taking your 25% tax-free cash alone does not affect how much you can pay into your pension in the future. The moment you start to draw on your pension, this triggers the money purchase annual allowance, which limits you to £10,000 a year rather than the usual £60,000 a year you can get tax relief on. This makes the decision to start drawing your pension a very important one.