Can you withdraw your pension early?

Whether you’re tempted to dip into your pension now or you just want to know how far away your retirement could actually be, here’s everything you need to know about when you can access the money in your various pots.

By Louise Cunnah

New

Created on: 28/08/2025

Reading time: 6 mins

Are you planning to retire as young as you possibly can, or does this milestone feel so far off that you’re tempted to dip into your pension savings now?

Whichever end of the scale you’re at, you’ll want the same question answered: ‘can I access my pension early’? Well, let’s find out.

We all know that paying into a pension is an important part of planning for the future. After all, no one wants to be working when they should be enjoying their golden years.

But during periods of financial hardship, it’s understandable why you’d want to access the money in your pension pots sooner, rather than later – especially if you feel like retiring is still years away.

So, can you withdraw your pension early?

Technically, yes – but there are restrictions and consequences to be aware of.

In this blog, we’ll cover all the rules and tax implications, so you know exactly where you stand.

What does ‘withdrawing your pension early’ mean?

Accessing your pension early typically means before the ‘normal pension age’, which is when you can typically withdraw from a private pension.

This is currently at age 55 but will be changing to 57 from 6th April 2028.¹ However, there are cases where you may be able to take your pension savings out earlier (which we'll go through in the section below).

Here are the different types of private pensions that this applies to:

Workplace pensions: you’ll typically be enrolled into one every time you start working for a new employer, and in most cases, you’ll both contribute to it each month.
Self-Invested Personal Pensions (SIPPs): you’ll set this up yourself and will be able to pay in when you feel like it (and you can do this while you contribute to a workplace scheme).

You may also be entitled to the government-funded State Pension, but this has different rules.

You’ll be able to access this later than your private pensions, and when this is will depend on the year you were born. If you’re curious, you can check your State Pension age here.

And although you may be able to take your private pensions early, this isn’t the case for the State Pension. If you need to retire sooner due to serious illness (for example), then you may be entitled to other benefits from the government.

When can I legally access my pension?

As we’ve already explained, the youngest age you can take a personal or workplace pension is 55 (or 57 from 2028). However, pension schemes all have different rules, so it’s worth checking what yours are for each pension pot you hold.

Now, you’re probably wondering: ‘can I withdraw my pension any earlier than this?’ And there are some exceptional circumstances² where you may be able to:

If you’re having to retire early due to ill health.
If you were enrolled in a scheme that gave you the right to access your money earlier than 55 (due to it having ‘a protected retirement age’) before 6th April 2006.

But what if neither of these apply to you? Can you withdraw your pension early at all?

You may see companies claiming that they can help you access pensions early – but as with many things that seem too good to be true, there is a catch.

If you take money out of a pension before you reach the minimum withdrawal age (and don't meet the criteria to withdraw early), this is classed as an ‘unauthorised’ payment – so you could have a hefty tax bill (and other charges too).

What happens if I access my pension before age 55?

If you use another company to access your pension savings sooner (despite not being ill or having a special pot with a younger retirement age), you could be taxed up to 55% on what you withdraw.³ This is because there are strict tax rules when it comes to pensions.

Any scheme that claims it can withdraw your pension early for you without penalty is a scam – and you could face other charges on top of this tax, or even risk losing the money in it entirely.

Let’s take the case of Mark Danvers, as an example. In 2009, he transferred a total of £35,000 from his pension pots into a specific type of SIPP, with the view of obtaining a loan to access this money sooner.

Two years later, HMRC opened an enquiry into his pension arrangements for the 2009/10 tax year, resulting in him being charged £10,260.80 on the loan he received from G Loans.⁴

Then there’s the case of Mr N, who was enrolled in the Police Pension Scheme by the Northumbria Police Authority. He wanted to access his pension before his scheme’s normal retirement age, so sought advice from a firm of financial advisers through an unregulated introducer.

This resulted in him transferring his defined benefit pension (worth a total of £112,077.66) to what he believed to be a defined contribution occupational pension scheme.

So, what happened? The sponsoring company went into liquidation, and it was also suspected that the former trustee was in breach of trust, putting Mr. N at risk of financial losses.

However, the Pension Ombudsman ruled that the Northumbria Police Authority had failed to warn Mr N of the risks of transferring (or carry out adequate checks on the scheme), and it was ordered to reinstate his accrued benefits or provide adequate compensation, as well as pay him £1,000.⁵

Now, Mr. N may have been lucky, but this story could have ended very differently.

So, to succinctly answer the question, ‘can I access my pension early?’: not without serious consequences, except in exceptional circumstances.

What scams should I watch out for?

But why do these so-called company claim to let you access to your pension early?

There are a couple of scams to be aware of, which you will see being referred to as early pension release, pension liberation, and pension review scams.

Here’s how they work:

With pension liberation scams, scammers will claim you can borrow from your pension, and that they will transfer your pot into a scheme set up by them (often based abroad). You’ll then be loaned money from the company, who will take a fee.

But you won’t just pay for the loan – there’s also that 55% tax bill from HMRC to think about too.

Then there’s pension review scams, which are commonly targeted at those who are over 55 (and are now likely to be able to start taking money from their pension).

The scammers will cold call or email you, offering a free review of your pension. They’ll then try to convince you to transfer money from your pot into a high-risk scheme – with promises of getting better returns or even guaranteed cash.

And because the money is put into riskier investments, you could end up losing anything you transfer out of your original scheme.⁶ However, it is worth noting that with all investing, the value of your pension can go down as well as up, which means you could get back less than you initially put in.

So, the key takeaway here?

Be wary of anyone who contacts you claiming they can unlock your pension early or tries to offer you free pension advice. Remember, you can only withdraw early if you meet the criteria we’ve outlined above – and if you’re unsure about your options, consider speaking to a qualified financial provider.

Tax implications of early pension withdrawal

If you’re nearing (or have already reached) the minimum age you can withdraw from your pension, then you may be tempted to start taking money from it, even if you’re not ready to stop working just yet.

This leads us onto another question you may have: ‘can I withdraw my pension early to boost the income from my job?’.

There’s no rule to say you can’t do this as soon as you have access to your pensions, but there are the following tax implications to consider:

You can usually take 25% from each of your pensions as a tax-free lump sum (though this is typically capped at £268,275 across your various pots).
You may be able to take more tax-free if you hold any protected allowances.
The tax you pay on the remaining 75% of your pots will depend on your Pension Allowance (for more information on this, check out our guide to income tax brackets).
Payments from your pension (outside of the 25% lump-sum) will be added to your total income for the year and will be taxed at the same rate.

And when we talk about ‘income’, we don’t just mean the salary you’re paid for doing your day job. In fact, any of the below count, and will form how much of your Pension Allowance you’ve used:

Rent you get from being a landlord
State Pension payments you receive
Interest earned from your savings
Profits made from your investments

Just FYI: interest and investment gains will only impact this if they’re not earned through an ISA – like a Cash ISA or Stocks and Shares ISA.

If you do want to withdraw from your pension but are unsure if it’s the right thing to do, it could be worth speaking to a financial adviser about your options.

And please remember that your tax treatment will depend on your individual circumstances, and it may be subject to change in the future.

Is it worth taking money out of my pension early?

Once you’ve taken 25% as a tax-free lump sum, the rest of your pension payments are subject to income tax. So, if you start receiving them while you’re still working, you could end up paying more tax in the long run.

And when it comes to accessing your pensions early, there are other factors to think about too.

If you start withdrawing too early, then you could run the risk of running out of money when you retire – especially as there can be a considerable gap between when you can take your private pensions (like your workplace ones) and when you start receiving the State Pension (if you’re eligible for it).

There’s also the simple fact that the longer you keep your money invested in a pension, the more time it has to potentially grow due to ‘compounding’.

The potential to make profits is why the investing approach is taken (as money is grown either from dividends, or from selling assets at a higher price than you purchased them for). And if you keep these in your pot to be re-invested, then they could also go on to make a profit – leading to more opportunities for growth.

What are my options if I still want to retire early?

If you’re still yearning for an early retirement and don’t want to wait until you can access the funds in your pensions, then it could be worth considering other ways to save too.

In fact, there’s another tax efficient way to grow your money; and that’s by using ISAs.

These are basically just savings and investment accounts, but you won’t have to pay tax on any of the gains you make on your money – whether that’s interest earned in a Cash ISA, or profits you’ve made from the investments held in a Stocks and Shares ISA (which are both offered by Wealthify).

And although the rules on when you can withdraw will differ from provider to provider, you can do this whenever you like with our ISAs (although you may not be able to do this with others offered on the market).

But if you don’t mind waiting until your 50s, then you could also pay more into your pensions now and give them a better chance to grow until you’re ready to access them (remember what we said about compounding earlier?).

This could be by:

Upping the amount you pay into your workplace pension each month (and it may be worth seeing if your employer matches higher contributions).
Opening a Self-Invested Personal Pension (like the one we offer at Wealthify) to have an extra pot to save in, with the flexibility of being able to contribute whenever you like.

If you choose a Personal Pension (SIPP), there’s also the added benefit of a 25% tax-relief top-up on your personal contributions, which we’ll add to your pot (if you’ve opted-in for it). This means that for every £80 paid in, you’ll get an extra £20 from the government – turning your contribution into £100.

This is something that you won’t get with an ISA, so it’s worth assessing your options – and if you’re still unsure, consider speaking to a financial adviser.

Conclusion

To recap: can you withdraw your pension early? If you want to avoid a big tax bill or other charges, then this is only worth considering if you need to retire sooner than planned due to illness or are part of a protected scheme with a lower retirement age. But even then, the longer you leave your money in, the more time it has to potentially grow.

Remember: be wary of anyone who promises they can get around the government’s rules to grant you early access to your pension, as you could face serious consequences.

And if you are looking to potentially maximise your pension pot, why not check out our Self-Invested Personal Pension?

Your tax treatment will depend on your individual circumstances, and it may be subject to change in the future.

With investing, your capital is at risk, so the value of your investments can go down as well as up, which means you could get back less than you initially invested.

Wealthify does not provide advice. If you’re not sure whether investing is right for you, please speak to a financial adviser.