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Pensions
By Mike Freer, of BWCI
A READER said that they were planning to retire next year, at which point they will turn 62.
They said that they had recently inherited a house and wanted to focus on renovating it on a full-time basis for a couple of years. They added that they then planned to use it to generate some income to live on and wanted to take their pensions early to fund the next two years and asked whether that would be possible.
This depends on the rules of the different pension arrangements that you have. The income tax law in Jersey would allow you to take benefits from a pension scheme from as early as age 50.
However, it will depend on the particular rules of the scheme, so you need to check with your pension administrators. Most UK pension schemes are payable when you reach the age of 55, although this is scheduled to increase to 57 from April 2028.
You will normally be able to take up to 30% of your pension as a tax-free lump sum (UK schemes typically 25%), which may be all you need to do for now. Most schemes will generally allow you to take early retirement but remember that as the pension will be paid for longer than if you had retired later, it will be at a lower level than if you had waited until a later date.
