Blog » Why so many over 55s take pension cash early

Why so many over 55s take pension cash early

January 18, 2019
The details provided in this article are for general information only and are in no way deemed to be financial advice. All of the material is correct as of the publication date, but could be out-of-date by the time you read the article.

Between April 2015 and September 2017, *72% of people dipped into their pension pot before the age of 65. In fact, some people have even withdrawn it all! Hang on, did we just say before the age of 65? That’s right. From the age of 55, you have the option to take lump sums of money from your pension, the first 25% of which is tax free. But why are so many people thinking about taking money from their pension pot early?

Let’s look at the top 5 reasons tax-free cash was taken in 2018**:

Primary reasons% of peopleSecondary reasons% of people
Tackle a debt31%Make home improvements19%
Make home improvements22%Tackle a debt16%
Buy/repair – car/van/motorbike11%Take a holiday15%
Help family9%Put in savings14%
Take a holiday8%Buy/repair – car/van/motorbike13%

Turn 55 soon? Here’s 4 things you need to know:

  1. You can opt to release up to 25% of your pension savings completely tax free.

  2. You can opt to take all your pension savings in one lump sum. If you do this or take a lump sum of anything over 25% of the total pension value, you will be subject to income tax at your marginal rate. Not only do you lose your hard-earned money to the tax man, but you will have significantly less to fund your retirement.

  3. You can leave your pension exactly as it is. Your savings can continue to grow meaning you have more in the pot when you need it.

  4. Or, Pension Access can review your current pension performance and find out if you could be in a stronger financial position when it comes to retirement. Plus, if you decide you want to take some pension cash early, we can help you to do that, providing you have an eligible scheme.

There are more options available. To make the right pension decision for you, the best thing to do is to speak to a financial adviser regulated by the Financial Conduct Authority. Taking money early from your pension might not be right for you, as it will leave you worse off in retirement; it shouldn’t be seen as an easy way to raise money. That’s why it makes sense to get financial advice before making any big decisions.

Middle aged couple looking at laptop | Why so many over 55s take pension cash early

Big decisions benefit from great advice

As pension advice specialists, here is what Pension Access can provide you:

  • A no obligation pension check
  • Impartial advice from regulated specialists
  • Ongoing advice and management of your pension
  • Fast, efficient service – we make the process easy for you

* FCA Retirement Outcomes Review: June 2018
**Data and statistics provided by Pension Access. Primary and secondary reasons for taking tax-free cash in 2018 – 1st Jan to 21st Nov 2018

Related posts

Thinking about your pension options?

We are authorised and regulated by the Financial Conduct authority. This means we can help you to make the best possible decisions when it comes to your pension.

0800 009 3388
Mon-Fri 9am-5pm


Pension Access is a trading name of Harbour Rock Capital Limited which is registered in England & Wales as a Limited Company, No. 10290349. Authorised and regulated by the Financial Conduct Authority, No. 754580. Registered Offices: Affinity House, Beaufort Court, Sir Thomas Longley Road, Rochester, Kent, ME2 4FD. Telephone: 0800 009 3388. Email:
© 2024 Pension Access. All right reserved.
What's in your info pack?
Your FREE information pack contains all the information you need to make an informed decision on wheter or not taking tax free cash from your pension is right for you.
Get your Free Info Pack
Complete the form and we'll send you an information pack in the post
Note: We are unable to advise on the state pension or any pension you are already taking an income from.

    Get your free info pack

    Where should we send your info pack?

    Please complete your details below and we'll send your information pack in the next available post

    Find Your address

    Type in your postcode or start typing your address then select from the drop-down list

    Your address

    We'll post your information pack here

    Keeping in touch

    We'll send you updates by email or text message. One of our specialists may call, just in case you have any questions about your pension. We’re big believers in never bombarding people with calls.

    Safety PadlockYour information is safe with us. Our calls are recorded for regulatory, legal and training requirements. Please see our privacy notice for information on our data practices here


    Hands using calculator to calculate home equity amount