This depends on the reason why you retire:
- if you retire on ill health grounds, you will not have a reduction applied to your pension
- if you retire on the grounds of redundancy or efficiency and are over the age of 55 your pension will not be reduced
- if you retire voluntarily before your normal pension age (NPA) it is likely that your pension will be reduced to reflect early payment.
How much will my pension be reduced by?
From November 2018, the pension reduction is no longer gender specific.
How much your benefits will reduce by depends on how early you draw them. The earlier you retire, the greater the reduction:
|
Years early |
Pension reduction |
All members lump sum reduction |
|
1 |
5.1% |
2.3% |
|
2 |
9.9% |
4.6% |
|
3 |
14.3% |
6.9% |
|
4 |
18.4% |
9.1% |
|
5 |
22.2% |
11.2% |
|
6 |
25.7% |
13.3% |
|
7 |
29.0% |
15.3% |
|
8 |
32.1% |
17.3% |
|
9 |
35.0% |
19.2% |
|
10 |
37.7% |
21.1% |
|
11 |
41.6% |
N/A |
|
12 |
44.0% |
N/A |
|
13 |
46.3% |
N/A |
The above are the current figures. These are reviewed and updated each year from information supplied by the Government Actuary's Department (GAD).
It is now possible to retire voluntarily from the age of 55 but if you retire before 60, your pension will be reduced depending on how long before your normal pension age you retire. If you retire after 60 but before your normal pension age it is likely that your pension will still be reduced for early payment.
Your pension built up before 1 April 2014 has a protected Normal Pension Age, which for almost all is age 65. View our protected NPA page for more information.
There are some circumstances where employees can retire before their normal pension age but after 60 without incurring the full reduction on their pension.
The 85 year rule and protected NPA pages explain these circumstances in more detail.