To retire early means to take your benefits before you reach your Normal Pension Age (NPA). If you look at your benefit statement on My Pension Online, you will find your NPA. It will likely be somewhere between 66 and 68. When you see how old you need to be to receive your pension benefits automatically, you may realise that early retirement could be a real option for many of us.
The impact on your benefits
You can take your benefits from the age of 55 and if you are leaving service. The amount you receive will be reduced to account for the fact you are being paid early. Remember, it means you will have made fewer contributions, and you will receive the benefits for longer. Consequently, the amount you are paid must reflect this. You will receive Actuarially Adjusted Benefits (AAB). This means that a statistician has applied a formula to your situation to make the benefits you receive fair.
How it works
The process of early retirement works differently depending on if you are in pensionable service or not. If you are currently still working, your employer will need to agree that you can leave service and take your benefits. Your employer can withhold consent for more than six months. Your benefits will then be paid the day after you leave pensionable service.
It is easier if you have left teaching. You can then choose your retirement date. However, there is a six weeks processing period between signing your form and receiving your benefits.
If you need to calculate your benefits to give you an idea of your payments, then you can go to the Teachers’ Pension Scheme website and use the calculators. Once you are happy to apply, you can then find the forms you need on the site too.
The content in this article was correct on 18th December 2019. You should not rely on this article to make important financial decisions. Teachers Financial Planning offers advice on pensions for teachers and non-teachers. Please use the contact form below to arrange an informal chat with an advisor and see how we can help you.