Should you use your pension at age 55

You are allowed to take money from your pension plans from age 55 at present. This applies whether they were accumulated by you or shared by your ex-spouse, but should you? You built up a pension over the years or received money in your divorce settlement to provide you with income in retirement. However, it may be possible to subsidise your income now, but should you use your pension at age 55?

Pension flexibility

When pension flexibility was introduced 5 years ago, in April 2015, the national newspapers were full of stories of panic about people withdrawing their entire pension fund to buy a Lamborghini. This would then leave them with nothing to live on in retirement and relying on the state. In reality, most people didn't do that. When you take your whole pension, part of it would be tax free, in most cases. The rest is added to your income and taxed accordingly. Most people decided against taking the whole amount out. You are probably not planning to use your pensions for a new supercar but should you use some to make life easier now?


Before we go any further, what is lifestyle? To my mind, lifestyle is what you do and what you spend money on. This means that no two lifestyles are the same. Different people prioritise different things. When you have a certain lifestyle, you don't want to give it up. You really don't want to find that you can't afford it once you're retired. It may then be too late to add to your financial pots.

Using your pensions before retirement

When you get divorced, life changes completely. If you've received a pension share, it may be that you can use some of the money in that pot to subsidise your lifestyle now. It could allow you to do some things that you didn't think were possible. The important thing is that you don't use the money now and find that you run out during retirement. This is where a financial planner comes in.

Understand what you need

When I work with clients, my job is to help you to understand what your life looks like now, what you would like your life to look like, whether you can sustain it for the rest of your life and what you need to do. Once we understand all of this, we can work out how you can use the money you have available. It may be that using your pension or pension share can help you to achieve your desired lifestyle.

If you are interested in finding out more about whether to use your pensions now, please email Please note, the above is for information only. Please discuss any actions you may plan to take with an expert first.

Tamsin Caine

Tamsin is a Chartered Financial Planner with over 20 years experience. She works with couples and individuals who are at the end of a relationship and want agree how to divide their assets FAIRLY without a fight.

You can contact Tamsin at or arrange a free initial meeting using She is also part of the team running Facebook group Separation, Divorce and Dissolution UK

Tamsin Caine MSc., FPFS

Chartered Financial Planner
Smart Divorce Ltd

P.S. I am the co-author of “My Divorce Handbook – It’s What You Do Next That Counts”, written by divorce specialists and lawyers writing about their area of expertise to help walk you through the divorce process. You can buy it here

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