Ill-health retirement: how to take your pension early

The earliest you can usually take money from your pension is age 55 (57 from April 2028). If you’re younger and cannot work due to your health, check if you qualify to take your money early. 

This is often called an ill-health pension, early medical retirement or retirement on medical grounds. 

Depending on the type of pension you have, you might be able to:

• get paid a regular income 

• take amounts as and when you need them

• take the whole amount in one go.

If you’re under 75 and expected to live less than a year, you might be able to take all your pension as a tax-free lump sum.

The criteria for an ill-health pension can vary between pension providers. For example, you might qualify if you have tried all treatments and:

• cannot do your current job, or

• cannot do any job.

You can usually find your pension provider’s rules and the medical evidence they would need:  

• on your provider’s website or paperwork you’ve received

• by contacting them.

You cannot get your State Pension any earlier than your State Pension ageOpens in a new window – even if you’re unable to work or terminally ill. 

For more information, see our guide State Pension: how it works.

How much your ill-health pension would pay depends on:

• the type of pension you have 

• the rules of your scheme

• if you’re expected to live less than 12 months. 

You can use our tool to find out your pension type, check paperwork or ask your provider.

If you have a defined benefit pension (often called a final salary or career average scheme) and qualify to take it early due to poor health, you might still get the full amount it promised to pay.    

But some schemes might reduce your pension income as you’re taking it earlier than your planned normal retirement date. Ask your pension provider to explain the rules that apply to you. 

If you have a defined contribution pension, your pension money is invested so it can grow until you decide to take it. This means:

• the value of your pension can rise and fall until you take the money
• if you take your pension early, you might:
  • get less than expected  
  • run out quicker than you had planned for.

You can see how much your pension is currently worth by logging in to your pension provider’s online account or asking them. 

If you qualify for an ill-health pension, you can usually choose how to take your money. These are the same options you would normally have if were able to take your pension at an older age.  

For example, you could choose to take up to 25% as a tax-free lump sum, convert some into a guaranteed taxable income for life and leave the rest invested – so you can take taxable amounts as and when you need them.  

See our guide about your options for taking a defined contribution pension for more information. 

You can also have a free Pension Wise appointment online or with one of our pension specialists to help understand all your options.   

If you’re expected to live less than 12 months, you might be able to take your whole pension as a cash lump sum.

If you’re under 75, any serious ill-health lump sum would be tax-free up to the lump sum and death benefit allowance (LSDBA). The LSDBA is £1,073,100 for most people.

If you’re over 75, the lump sum would be counted as your earnings. This means normal Income Tax rules apply.

For more information, see our guide Tax-free pension lump sum allowances. 

Even if you qualify to take your pension early, consider all your other options first. For example, getting a pension income might mean you lose entitlement to certain benefits or extra help.

If you’re disabled or have a health condition, your employer must make ‘reasonable adjustments’ so you’re not disadvantaged at work.

If you’d like to continue working, ask your employer if they can make changes to your job. This might include changing: 

• the hours you work
• where you work from
• the equipment you need to do your job. 

Staying in your job might also mean you can continue saving into your pension, so you should have more money when you retire.

For more information, see our guide about the support available to keep your job if you’re ill or disabled. 

You might be eligible for a payout if you have an existing insurance policy such as:

• income protection insurance 

• critical illness insurance.

If you qualify, you could get a lump sum or a regular payment for a set period. If your income later increases, regular payments might reduce or stop.

Our free and confidential Benefits calculator works out if you’re entitled to claim regular payments like Universal Credit, plus other help and grants.

You can also see what might happen to your entitlement if your income changed, such as taking your pension early. 

For more information, see our guide What disability and sickness benefits can I claim?

Your employer might be able to offer redundancy as an alternative to early retirement. But they cannot pressure you to leave.

Taking redundancy might mean you:

• get redundancy pay

• have the option to work again if your health improves. 

But it’s unlikely to give you enough money for the long-term. For more information, see our guide about voluntary redundancy.

For free and confidential employment law advice:

• in England, Scotland or Wales, you can call the Acas helplineOpens in a new window 
• in Northern Ireland, you can call the Labour Relations AgencyOpens in a new window

If you’d like to take early medical retirement, your pension provider will usually ask you to complete an ill-health retirement application form and include: 

• proof of your medical condition or diagnosis 

• agreement from your employer that you’re not retiring for another reason. 

Your pension provider, trustees or employer will then review your case and make a fair and reasonable decision based on the rules of your scheme. This might include getting medical advice or opinions from your doctor and other experts.  

If you’re not sure taking early medical retirement is right for you, consider paying for financial advice.

Our tool can help you find a retirement adviser or see our guide Choosing a financial adviser  for more information.  

If your pension provider doesn’t accept your application for early retirement, you should get a report explaining:

• why your application was declined

• how much time you have to appeal if you disagree. 

You can then challenge if you don’t think the decision was made properly or in line with the rules of your scheme. You could also provide different medical evidence if your provider wasn’t happy with the information you originally sent them.  

For step-by-step help, see our guide What to do if your ill-health pension is refused.