Ill health retirement age: how it differs from early retirement

Ill health retirement age is not a set number: HMRC's test asks whether illness stops you doing your job, and your scheme's own rules add the rest.

Free guidance comes first: MoneyHelper's Pension Wise service is impartial, government-backed and open to people with a defined contribution pension who are retiring early through poor health. Would you rather have someone go through the health side and the pension side together? An FCA-authorised adviser will do exactly that by phone, free, if you send the short call-back form on this page.

What age can you take ill health retirement?

There is no age written into HMRC's ill-health condition. The Pensions Tax Manual says that "no pension may be paid before the member reaches normal minimum pension age unless the ill-health condition is met", and the condition has two parts. A registered medical practitioner's evidence must show that you are, and will stay, medically incapable of continuing your current occupation, physically or mentally, through injury, sickness, disease or disability; and you must then stop that occupation. Both parts concern your health and your job, not a birthday.

Normal minimum pension age is 55 today and 57 from 6 April 2028. The ill-health condition is the exception to that age, which is why it matters most to someone who has not reached it. The same manual notes that "The tax rules do not set a maximum age by which pension benefits must be put into payment", so a pension can also start later.

A separate rule covers a serious illness with a life expectancy under a year. For that lump sum the manual states: "There is no minimum age for the payment of a serious ill-health lump sum." Cashing in the whole pot that way has its own page, cashing in a pension when you are ill, and the wider qualifying test is in ill health retirement in the UK.

HMRC's condition is only the floor. It adds that "scheme rules may have stricter ill-health criteria", and in practice the scheme's own rules, including any age or service limits, decide whether and when you are paid.

Ill health retirement vs early retirement: what is different?

Early retirement is a question of age. Taking a pension before State Pension age is possible for most people from 55, or 57 from 2028, as explained in taking a pension at 55, the rise to 57 and retiring early in the UK; a small group keep an earlier age through a protected pension age. Ill health retirement is a question of capacity: you need medical evidence and a scheme decision, but the minimum age does not stand in the way.

The payment can differ too. Teachers' Pensions describes its ill-health retirement as taken "before your Normal Pension Age (NPA) without the usual reduction applied to an early retirement pension". With a private pot, GOV.UK says you might get higher payments if you need to take your pension early because of a health condition, so ask your provider; enhanced annuity rates explains how health can affect an annuity. Whether to start early at all, when your health allows a choice, is weighed in taking your pension early or waiting.

Where do schemes draw the age line?

Each scheme words its own rules, so these three are examples, not a pattern. Each is described as that scheme's page prints it.

• NHS Pension Scheme. To be eligible you need two years in the scheme, must be too ill for your present job and must be "under the normal pension age" — 60 in the 1995 Section and 65 in the 2008 Section, or in the 2015 Scheme State Pension Age (65 if that is later), according to NHSBSA. The 2015 members' guide adds: "The minimum pension age does not apply in the case of ill health retirement." The scheme's own page is covered in NHS ill health retirement.
• Local Government Pension Scheme. The scheme's member website for England and Wales says "Ill health benefits can be paid to you at any age." A two year qualifying period applies, and the test looks ahead: the scheme's Normal Pension Age, which is linked to your State Pension age, is the point your employer must be satisfied you cannot work your job until. For the full tiers see LGPS ill health retirement.
• Teachers' Pension Scheme. "The earliest retirement benefits can be paid is age 55, unless you’re granted ill health benefits." Ill-health pay-outs can begin ahead of Normal Pension Age, and the scheme's ill-health page gives two years' service as the length needed to qualify for ill-health benefits. Further detail: teachers' ill health retirement.

Other public sector schemes, such as the civil service and police pensions, set their own ages. Where your own scheme sits against these three is a question an adviser will answer without charge after you use the short call-back form on this page.

How do your age and service change the amount?

Two things feed the figure: the pension already built up from your membership and pay, and any enhancement counted from the day you leave up to the scheme's normal pension age. Leaving earlier does not by itself shrink the pension, because the schemes below pay what you have earned without a reduction for starting early.

• NHS. Tier 1 pays the pension you have already earned, without reduction. For Tier 2, NHSBSA says members of the 1995 and 2008 Schemes get Tier 1 benefits "plus two-thirds of your prospective membership up to the Scheme's normal pension age", and 2015 Scheme members get one-half of it.
• LGPS. Tier 1 pays the pension built up on leaving plus the pension you would have built up in the main section from your leaving date to Normal Pension Age. Tier 2 adds 25% of that extra pension. Tier 3 pays the pension already built up, temporarily, and it stops after three years at most. The increase uses Assumed Pensionable Pay, which is the average pay in the period before you leave, based on three months' pay if you are paid monthly.

Because the top-up is counted to normal pension age, the number of extra years depends on how far from that age you leave: someone close to it is credited with a shorter stretch than someone much younger, which is why your age and your service both matter and why two colleagues can receive different amounts. Teachers' Pensions and other schemes set out their own calculations in their ill-health guides, and the worked arithmetic is in how ill health pensions are worked out. Tax on what you receive is in tax on an ill health pension.

Your scheme's tier, leaving date and other pots can all be laid out in one conversation; the short call-back form on this page is how you ask for a free one.

Ill health retirement before 55, around 60 or after 65

Below 55, the ill-health route is usually the way a registered scheme can pay at all. HMRC says that any pension payment made before normal minimum pension age "is an unauthorised payment and will be taxed accordingly" unless illness is the reason for retiring or the member has a protected pension age. GOV.UK adds a caution: offers to free up money before 55 may be unauthorised payments, with tax of up to 55% on them. The FCA's pension scams page explains what to check.

Between 55 and your scheme's normal pension age (60 in the NHS 1995 Section, for example) the minimum age is no longer the obstacle, so the comparison turns on the amount and the scheme's tests. Beyond that, the NHS condition is that you are under normal pension age, and the LGPS test looks at being unable to work until it. After 65, or once you have reached the scheme's normal pension age, the ordinary retirement route is the more likely one; what the State Pension adds is in State Pension age and retirement age.

More on age limits and ill health retirement

Is there an upper age limit for ill health retirement?

Not in HMRC's tax rules, which set no maximum age for starting a pension. A scheme can set one: the NHS lists being under the normal pension age as a condition.

Can a deferred member take ill health benefits early?

Sometimes. The NHS 2015 Scheme members' guide (V13, 05.2024) says a deferred member who becomes too ill for regular employment may apply for early payment without reduction, but adds: "Your benefits will not be enhanced." The LGPS says its ill health section does not apply to a deferred pension and points to a separate page on deferred pensions.

Does the rise to age 57 change ill health retirement?

The ill-health condition does not depend on the minimum age, so the rise in April 2028 changes the age for ordinary early retirement rather than the health route. See the minimum pension age of 57.

Can I take a personal pension before 55 because of ill health?

GOV.UK says you may be able to take money out before 55 if you are retiring early because of ill health, but when you can depends on the scheme's rules, so ask your provider what evidence it wants.

Can I apply for ill health retirement in my 40s?

Age on its own does not rule you out: HMRC's condition contains no age, and the LGPS pays ill health benefits at any age. The scheme's service rule still applies, such as the two years the NHS and LGPS ask for, and returning to work later is covered in working after ill health retirement.

Before you contact your scheme

Ask for the scheme's ill health guide, the normal pension age it uses for you, the service it requires and how it counts your leaving date. Benefits that may sit alongside the pension are in claiming benefits with ill health retirement. Pensions, health and family can be looked at together in one free call; start it with the short call-back form on this page and the adviser rings you.