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Before 6 April 2006, the pension tax rules specified that the “normal retirement date” for most occupations should be between 60 and 75. Since April 2006, under the “pension tax simplification regime” introduced by the Finance Act 2004, there has been more flexibility. This legislation set a “minimum pension age” (55 from April 2010) and required people to turn their pension fund into an income stream by the age of 75. Within those limits, schemes are free to set a “normal pension age”. This is the age from which (other than on ill-health grounds) a person can draw an unreduced pension. The Conservative-Liberal Democrat Coalition Government has announced its intention to abolish the “requirement to annuitise” at age 75. For further details, see SN/BT 712 Pensions: requirement to annuitise.

Recent reforms to the public service pension schemes have, for the most part, resulted in the pension age increasing to 65 for new entrants. The Independent Public Service Pensions Commission is looking at how to ensure that normal pension ages are in line with the latest developments in longevity.

This note looks at the rules regarding the age at which occupational and personal pensions can be drawn. The age from which the State Pension can be drawn is dealt with in a separate note SN/BT 2234 State Pension age.

It is important to stress that the “retirement age” and the “pension age” are not synonymous. The retirement age is the age at which one can be required to leave work. The pension age is the age at which one can start to draw an unreduced pension. The retirement age is covered in a separate standard note, SN/BT/961 Retirement age.


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