Navigating the Transition from Work to Retirement

Many of your employee’s won’t work for you for their entire career. But at some point, a member of staff will retire.

And so it’s important to know what to do when that happens.

In this guide, we’ll cover the retirement age for men and women, state pension requirements and early retirement rules including for ill health.

What is the retirement age in the UK?

There is no set retirement age in the UK. Workers used to be forced to stop working at 65, this was known as the ‘default retirement age’.

This was scrapped in 2011, following a campaign by Age UK.

Some jobs still carry a compulsory end of employment, such as the fire service. This is because of the physical demand of certain jobs. It’s age discrimination to force someone to retire for any reason other than capability.

Because of this, when people talk about the retirement age, they usually mean the state pension age.

At what age can you claim a state pension in the UK?

The state pension retirement age is when you’re eligible to receive a pension from the government. The pension retirement age depends on when you were born.

As life expectancy has increased, so has the age at which you can claim a state pension.

When first introduced in 1948, the men’s retirement age in the UK was 65. The state retirement age for women was 60. The government brought this in line with the men’s rate in March 2010, when both were increased to 66.

This government has announced plans to increase the pension age again.

For anyone born on or before 5th April 1970, the pension age won’t be any change. They’ll be eligible to claim a state pension on their 66th birthday.

Anyone born between 6 April 1970 and 5 April 1978, the pension age is currently 67 but could rise to between 67 years and one month, and 68 years, depending on birth date.

For anyone born after 6 April 1978, the pension age is 68.

You can work out your exact state pension age using the government State Pension age calculator.

Can I take early retirement in the UK?

The rules on when an employee can draw a pension will differ for workplace or personal pension schemes. They usually let you take a pension earlier than the state pension.

There are many reasons someone might decide to retire early. However, doing so will affect their state pension allowance.

Taking early retirement means they won’t accrue as much in their pension pot and the money will have to go further. This will affect both state pension and any personal pension funds’

The minimum retirement age in the UK for most pension plans is currently 55. However, the government intends to increase this to age 57 on 6 April 2028.

Sometimes where an employee cannot work anymore, they can claim retirement before age 55. This is known as ill health retirement or being medically retired.

Ill health retirement

Ill health retirement can cover an employee if they are unable to work or their ability to earn has been impacted by long-term sickness and disability.

This type of retirement can cover conditions, and different pension schemes will have different criteria. Generally, they need to show that:

• They’re permanently unable to complete their role because of their condition.
• There are no further medical treatments available.
• They have explored all reasonable adjustments to enable a return to work.

If they’re unable to return to their role, an you may offer an alternative such as working fewer hours or a different role. In this event, they can still claim ill health.

As with choosing to stop working early, ill health  only applies to personal pension schemes. They won’t receive a state pension before reaching state pension age.

Expert support on end of employment with Peninsula

There’s a lot to think about when leaving a job, and even more to consider when retiring.

From the different pension scheme requirements, the changing ages at which you can retire and not to mention handing over your workplace responsibilities.

Peninsula clients get access to our 24/7 HR advice line, meaning you can get answers to all of your urgent retirement queries for yourself or your staff.

And if you’re not yet a client, you can still enjoy a free advice call from one of our business experts. Simply call us on 0800 028 2420.