Early retirement
If you like the idea of taking your pension before your Normal Pension Age, you may be interested in early retirement - as long as you're aware that it can have an impact on your benefits.
What is early retirement?
Unless you retire as the result of redundancy or ill health, your pension benefits are reduced for each year you take retirement before Normal Pension Age.
These reductions are based on ‘factors’ set by the Government Actuary’s Department (GAD), which can change from time to time and are outlined in the table below.
Select your scheme
If you retire before your Normal Pension Age, your pension is normally reduced because it is paid for longer.
Please note
The Government has announced that the earliest age you can take your pension will increase from age 55 to 57 from 6 April 2028. This will apply to flexible retirement too.
The latest figures for Local Government Pension Scheme (LGPS) early retirement are outlined in the table below.
| Years early | Pension reductions | Lump sum reductions |
| 0 | 0% | 0 |
| 1 | 4.9% | 1.7% |
| 2 | 9.3% | 3.3% |
| 3 | 13.5% | 4.9% |
| 4 | 17.4% | 6.5% |
| 5 | 20.9% | 8.1% |
| 6 | 24.3% | 9.6% |
| 7 | 27.4% | 11.1% |
| 8 | 30.3% | 12.6% |
| 9 | 33% | 14.1% |
| 10 | 35.6% | 15.5% |
| 11 | 39.5% | N/A |
| 12 | 41.8% | N/A |
| 13 | 43.9% | N/A |
The amount of the reduction depends on how many years early you take your pension.
- The earlier you retire, the larger the reduction.
- The closer you retire to Normal Pension Age (NPA), the smaller the reduction.
- If you take your pension between two whole years, the reduction is adjusted to match the exact number of days.
Depending on when you paid into the scheme, different parts of your pension may be reduced by different amounts.
- Benefits built up on or after 1 April 2014 – your NPA is the same as your State Pension Age
- Benefits built up before 1 April 2014 – your NPA is usually age 65, unless special protections apply like the 85-year-rule.
For example:
Steven retires at age 63 and his NPA is age 67.
- The benefits Steven built up on or after 1 April 2014 are paid 4 years early. So, this part of his pension is reduced by 17.4%.
- The benefits Steven built up before 1 April 2014 (with a protected NPA of age 65) are paid 2 years early. So, this part of his pension is reduced by 9.3%.
You can ask your employer if they would agree to not reduce your pension, or allow the 85 year rule to be applied before age 60 (so the reduction amount may be smaller).
This decision is at your employer’s discretion and there may be a cost to them. To start, you can ask to see their LGPS pension discretionary policy, which all employers should have.
If you retire before your Normal Pension Age, your pension is normally reduced because it is paid for longer.
The latest figures for 2015 Firefighters’ Pension Scheme (FPS) early retirement are outlined below.
If you are still paying into the 2015 scheme, you can retire early from age 55, but your benefits will be reduced for each year you take retirement before Normal Pension Age:
| Age | Pension reductions |
| 55 | 20% |
| 56 | 16.6% |
| 57 | 12.9% |
| 58 | 8.9% |
| 59 | 4.6% |
If you are no longer paying into the 2015 scheme but haven’t taken your pension yet, you can retire early from age 55. Just be aware that your benefits will be reduced for each year you take retirement before your State Pension Age:
| Age | State Pension Age 66 | State Pension Age 67 | State Pension Age 68 |
| 55 | 42.3% | 44.6% | 46.8% |
| 56 | 39.8% | 42.3% | 44.6% |
| 57 | 37.1% | 39.8% | 42.3% |
| 58 | 34.2% | 37.1% | 39.8% |
| 59 | 31.1% | 34.2% | 37.1% |
| 60 | 27.8% | 31.1% | 34.2% |
| 61 | 24.1% | 27.8% | 31.1% |
| 62 | 20.1% | 24.1% | 27.8% |
| 63 | 15.8% | 20.1% | 24.1% |
| 64 | 11.0% | 15.8% | 20.1% |
| 65 | 5.8% | 11.0% | 15.8% |
| 66 | Paid in full | 5.8% | 11.0% |
| 67 | Paid in full | 5.8% | |
| 68 | Paid in full |
What if I moved (transitioned schemes)?
As a transitional member, your eligibility to retire comes from the rules of the final salary scheme you were in before you joined the 2015 scheme. If you have benefits in the 1992 or 2006 firefighter schemes, you could take the pension you have built up in that scheme at the earliest retirement age for that scheme, as shown below:
| Scheme | Earliest retirement age |
| 1992 | Age 50 (as long as you have paid into the scheme for at least 25 years) |
| 2006 | Age 55 (with reductions for early retirement) |
| 2006 Special Members | Age 55 |
The earliest you can take your pension in the 2015 scheme is at age 55. So, if you have 1992 benefits and want to retire before age 55, your 2015 benefits would be deferred until State Pension Age. Or you can choose for it to be paid from age 55 but with reductions for early retirement.
Visit the LGA website for more details on your retirement options.
Your pension benefits are reduced for each month you take retirement before Normal Pension Age. The latest figures for Police Pension Scheme (PPS) early retirement are outlined in the table below.
| Month | Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
| 0 | 1.000 | 0.955 | 0.913 | 0.875 | 0.839 | 0.806 |
| 1 | 0.996 | 0.952 | 0.910 | 0.872 | 0.836 | N/A |
| 2 | 0.993 | 0.948 | 0.907 | 0.869 | 0.833 | N/A |
| 3 | 0.989 | 0.945 | 0.904 | 0.866 | 0.830 | N/A |
| 4 | 0.985 | 0.941 | 0.900 | 0.863 | 0.827 | N/A |
| 5 | 0.981 | 0.938 | 0.897 | 0.860 | 0.825 | N/A |
| 6 | 0.978 | 0.934 | 0.894 | 0.857 | 0.822 | N/A |
| 7 | 0.974 | 0.931 | 0.891 | 0.854 | 0.819 | N/A |
| 8 | 0.970 | 0.927 | 0.888 | 0.851 | 0.816 | N/A |
| 9 | 0.966 | 0.924 | 0.884 | 0.848 | 0.813 | N/A |
| 10 | 0.963 | 0.920 | 0.881 | 0.845 | 0.810 | N/A |
| 11 | 0.959 | 0.917 | 0.878 | 0.842 | 0.808 | N/A |
In some circumstances, your employer may agree not to reduce your benefits as an ‘employer discretion’. You would need to speak to them about whether this is an option. Alternatively, you can reduce or avoid any benefit reductions by taking your pension at a later date.
