Can I retire at 55? A UK worked example you can change

Yes, if your money can pay for the years before your pensions and state pension start, and then keep going. Two dates matter. The earliest age to take money from most pensions is 55 today, rising to 57 on 6 April 2028. The state pension starts between 66 and 68, depending on when you were born.

The calculator is a worked example: someone aged 50 retiring at 55, with £425,000 in a workplace pension, an ISA and cash today. Your money lasts to 95, with £85,261 left.

The two gaps to cover

Before your pensions. From 6 April 2028 the earliest age to take money from a pension rises to 57, unless your scheme gives you a protected pension age. In this example the 2 years before the pension can be touched are paid from: Stocks and shares ISA £56,000.

Before the state pension. The state pension doesn't start until 66 to 68. In this example the 12 years from retiring to the state pension at 67 are paid from: Workplace pension £302,615, Stocks and shares ISA £56,000 (totals in today's money).

How long different pots last if you retire at 55

Each row uses the same assumptions: £30,000 a year take-home in today's money, 80% of the pot in a pension and 20% in an ISA, 5% growth a year before fees, 2.5% inflation, and the full state pension from 67.

Pots at 55	Steady growth: money	Lasts to 95 in
£300,000	falls short from 65	0 out of 100 market tests
£500,000	falls short from 77	13 out of 100 market tests
£800,000	lasts to 95	59 out of 100 market tests

Steady growth gives one answer. The last column tests each pot 500 times, each with a different random mix of good and bad years in the markets, and shows how often the money lasts to 95.

Tax when you retire at 55

• Up to 25% of each pension can usually be taken tax-free, with a limit of £268,275 across all your pensions. The rest is taxed as income.
• Income tax uses your £12,570 personal allowance first, then 20%, 40% and 45% bands.
• Taking taxable money from a pension pot usually cuts what you can pay into pensions with tax relief to £10,000 a year (the money purchase annual allowance). Taking only the tax-free cash doesn't.

What the stress tests show

In this example, a 25% market fall in the first year of retirement means the money still lasts to 95. With growth 2 points lower every year it falls short from 79. In 52 out of 100 market tests it lasts to 95.

Other things that change the answer

• A final salary pension taken at 55 is usually reduced for each year it's paid early. See taking a final salary pension early.
• Two of you? Tick "Planning for two" in the calculator to give each person their own tax allowance and state pension.
• From 6 April 2027 unused pensions count towards your estate for inheritance tax. See inheritance tax on pensions.