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Retirement Choices

Late retirement

Most workplace pension schemes set an age at which you're expected to take your benefits. However, you don’t have to take your benefits then and you can take a late retirement.

Late retirement

Most workplace pension schemes set an age at which most people are expected to take their benefits, referred to as normal retirement age. This is usually 65. If you have a personal pension, you choose the date when you think you will want to open your pot. This is usually referred to as your selected retirement date.

You don’t have to take your benefits when you reach the retirement age under the scheme. You can decide not to have the benefits. This is generally known as taking late retirement. Different rules apply depending on whether your pension is in a defined contribution scheme or a defined benefit scheme. The different choices  available are set out below.

Late retirement from a defined benefit scheme

You can leave your benefits in the scheme after normal retirement age, but some schemes may still have an age, usually 75, when you have to take them. If you decide to take a late retirement, your pension income is likely to be larger than if you had taken it at normal retirement age. This will be either:

  • because you continue to build up pension for the extra time you’re in the scheme; or
  • because the scheme will increase the pension when you come to take it. The increase is paid because the pension is likely to be paid for a shorter time than planned. 


Late retirement from a defined contribution schemes

You can leave your pension pot unopened until you want to open it.  At this point, you can choose to use some, or all of it, to buy an income (an annuity) from an insurance company, or take an income from your pot (known as income drawdown).

However you choose to use your pension pot, generally the longer you leave the money invested and continue to pay into it, the higher the income will be when you choose to take it. It’s important to check that where your pension pot is invested is still correct in view of the delay in taking benefits. You should check out the rules for late retirement with your provider, they’ll be able to explain your options in more detail.


Frequently asked...

Where can I find out more?

If you need more information, please contact us. A pension specialist from our team will be happy to help with whatever pensions-related question you have. Our help is always free.

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