Ill-health retirement is when you can access your pension early because of poor health. You’ll sometimes see this referred to as medical retirement or retirement on medical grounds.
If you have a private or workplace pension, you might be able to begin taking an income and/or lump sums from your pension at any age due to ill health. The normal minimum retirement age of 55 doesn’t apply.
Different pension schemes have different rules, so ask your pension provider or scheme administrator for details. Some allow you to access your pension early if it looks as if you won’t be able to return to your job due to physical or mental illness. Other schemes might require that you won’t be able to do any job, not just your own.
In cases of serious ill health where your life expectancy is less than one year, you might be able to take all your pension as a tax-free lump sum.
You’ll need to provide supporting medical evidence if you want to access your pension due to ill health.
If you have an income protection plan (also known as permanent health insurance), you need to seriously consider whether you choose to access your pension. This is because any income you get from your pension could reduce the payments from the income protection plan. You should also check whether accessing your pension may affect eligibility for state benefits.