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State Pension - penalties for early retirement?

(48 Posts)
NannaGrandad Thu 24-Sep-20 17:27:14

Has anyone retired a few years earlier than the new state pension age?
What happens to your pension entitlement if you have full contributions when you stop working but don't make any further contributions in the 3 or 4 years leading up to your official retirement date?
I'm 62 with over 40 years worth of contributions and ready to quit but wonder what the financial implication of doing so will be.
Thanks for any help or advice you can offer.

Pantglas2 Thu 24-Sep-20 17:58:05

There won’t be any reduction once you have thirty five full years but check that none of those were ‘contracted out’ by going on the government website. They will give you the actual figure you’ll get at retirement age which is £175.20 assuming full entitlement.

Cheesey Thu 24-Sep-20 18:42:33

I retired at 59, albeit with 43 years full contributions. I worked full time from age 16 to 59. I have lived on my occupational pension, supplemented by drawing on my pension lump sum, since then.
I was contracted out all my working life and my state pension estimate on Government Gateway, if I do not make any further contributions in the next few years, is £137.37.
I am not complaining by the way, I am very glad of my decent (not enormous) occupational pension. I am simply stating this in case it is of use to the OP.

Daisymae Thu 24-Sep-20 19:01:51

You should get into the government gateway site and have a look at your predicted pension. I would imagine that if you have sufficient contributions then retiring early would not impact. However I would check first before you make any decisions.

May7 Thu 24-Sep-20 19:20:01

Yes as pantglas rightly says it all depends on whether you have contracted out at some point as to whether you have enough contributions for a full state pension. Easily checked out through Gateway though

Jaxjacky Thu 24-Sep-20 19:32:27

Others are absolutely right, login in to gateway, it tells you you’re projection

GrandmaMoira Thu 24-Sep-20 19:32:34

My SIL stopped work at 60 and had some issues re her pension which she became entitled to this year, despite having many years contribution. I cannot remember the details but would urge you to check it out.

Urmstongran Thu 24-Sep-20 19:57:40

I retired at 60y (6 years ago) and got my SP two months ago. It’s £670 p.m. Got asked in May to apply for it. No problems.

Urmstongran Thu 24-Sep-20 19:58:04

£690 p.m.

NannaGrandad Mon 28-Sep-20 07:40:12

Thank you all for your help. I have checked on the government gateway and it says I’m entitled to a full pension at 66. I was just concerned about not making contributions for 4 years.
I can’t get through to anyone to speak to so I’ll hold fire for now but from your responses it looks as though I’ll be ok.

Urmstongran Mon 28-Sep-20 08:16:36


sf101 Mon 28-Sep-20 08:32:03

Make sure you read the small print. The SP changed in 2016, and if you were contracted out, to get the full new pension you had to pay in for another 5 years after 2016 despite 40 plus qualifying years prior to that.

NannyJan53 Mon 28-Sep-20 08:45:20

I received my SP at 64 1/2, but I retired 9 months before then. I had the full 35 years contribution, so received the full amount, even though I did not make any contributions for the last 9 months.

Susie60g Mon 28-Sep-20 09:58:58

Am i understanding this right. I am now 61 entitled to full sp at 66 can i retire and claim it now?

Grannygrumps1 Mon 28-Sep-20 10:05:47

I have done similar to you. I retired last year at 63. (Now 64)
I rang the national insurance number and checked with them. I have 49 full years. I had a few which were contracted out but needed confirmation this would not affect my pension. It does not affect it. If you were contracted out the rules have changed slightly because pension age has changed and you are now longer allowed to be contracted out. If you are not sure then give them a ring. It’s a local rate call and they were really helpful and quick when I rang.

Grannygrumps1 Mon 28-Sep-20 10:07:40

Susie60g ... NO.

If that were the case we would all be claiming.

RobtheFox Mon 28-Sep-20 10:08:42

As Gateway says you have full contributions will get full pension. It will continue to attract the index linked increases meanwhile. You need not do anything until about four months before you become eligible when you should be invited to apply for it. You should be sent a pack from the Pensions Service but if you don't get one then contact them. There is no need or requirement to pay contributions for the four year period...unless, of course, you resume working!

MissChateline Mon 28-Sep-20 10:11:40

I retired at 60 and was shocked to find that even with what I thought were full contributions that I had to top this up by paying class 3 payments. This was about £1000.00 per full year in order to receive the full state pension payment. However I was told that I would recoup this in 3 years.
I am actually on the phone at this very moment trying to get through to make my claim as I got my letter and code on Friday.

Susie60g Mon 28-Sep-20 10:20:34

@grannygrumps i thought i had it wrong lol. Never mind it was s nice thought

Frankie51 Mon 28-Sep-20 10:23:46

If you have enough to live on with your works pension go for it. I retired early as the job I had was extremely stressful (I worked on mental health wards) , and I just needed to stop for my own mental health.. I had 40 years full contributions to the state pension. Until I got my state pension., I lived on my works one.
It was my choice, I still had my mortgage to pay for a year, but it was worth it. I managed bills, food, mortgage. No holidays or going out till I got the state one. I'm glad I did, I had what they call burnout. I think my physical health my have suffered too had I not made this decision.

Molly10 Mon 28-Sep-20 10:25:05

You can request a personal assessment which will check all your details whether contracted out/years etc. They will send you a full estimate. If you qualify on all counts for a full pension it does not matter if you take early retirement now with no further payments made. If you are in a healthy financial situation to do that for the interim years till your state pension is payable, and want to do it, then go ahead and enjoy.

Harris27 Mon 28-Sep-20 10:46:40

I’m 60 working in childcare and finding it tiring still got 6;years to go hope I make it! Couldn’t afford to retire early but if you can go for it after asking the right questions.

Scottiebear Mon 28-Sep-20 10:55:55

I retired at 60 with a couple of small work pensions. Will get my state pension in about a year at 66. I too have the full amount of years, but was contracted out for some of the time. So I wont get full amount. DHs pension is the same. Government internet pension site is quite easy to access, but a little confusing to understand. We could have paid top ups to take us up to full pension. But it was quite a lot of money and it would take many many years of receiving pension for us to make the extra payments back.

Brigidsdaughter Mon 28-Sep-20 10:59:15

Can someone explain 'contracted out' please?
Is this something one had to do personally or something that just happened?
Thanks in advance

Pantglas2 Mon 28-Sep-20 11:10:14

Most ‘contracted out’ would be if you worked in public services or larger private sector firms although in my case it was a personal pension.

As I took early retirement in 2017 at age 61, I was £10 short (two years) for the full £175.20pw (@ April 2020) so made the decision to buy those years at a total £1450.

I calculated that I would get that sum back in just less than 3 years of SP age in 2021, based on my current good health it was a gamble I willingly paid.