Retirement guide
Can I take my pension and keep working?
Yes, in many cases you can start taking pension benefits while continuing to work. But the way you take money can affect Income Tax, future pension contributions and how long your retirement savings may last.
Private pensions
You can often access a pension before fully retiring.
MoneyHelper confirms that you can usually take money from a private pension and continue working at the same time. For many people, the normal minimum pension age is currently 55 and is scheduled to rise to 57 from 6 April 2028, subject to protections and exceptions.
Depending on the pension, you may be able to take tax-free cash, use drawdown, take lump sums or buy guaranteed income while employment continues.
The tax rules set the normal minimum pension age, but the pension provider or scheme may have its own retirement age and access rules.
Income Tax
Salary and taxable pension income are looked at together.
GOV.UK confirms that you can work while receiving a private, workplace or State Pension. Taxable pension income is added to your other taxable income when calculating your Income Tax position.
A withdrawal that looks modest in isolation can produce a higher tax bill when combined with salary, bonuses, rental income or other taxable income.
Private and workplace pension providers normally deduct tax through PAYE before making taxable pension payments.
Still paying into pensions?
Flexible taxable withdrawals can restrict future pension saving.
If you take taxable income flexibly from a defined contribution pension, you can trigger the Money Purchase Annual Allowance. For 2026/27, the MPAA is £10,000.
This matters particularly where you plan to keep working and your employer continues making pension contributions.
The method used to access the pension matters. If continued pension saving is important, check the effect before taking taxable withdrawals.
State Pension
You can claim State Pension and continue working.
GOV.UK confirms that you can continue working after State Pension age and claim your State Pension at the same time. You can also choose to defer it, which can increase the weekly amount when you later claim.
If you are employed, you normally stop paying employee National Insurance once you reach State Pension age, although Income Tax can still be due on your total taxable income.
It is generally paid without tax being deducted directly, so HMRC may collect the tax due through the tax code applied to employment or another pension.
Phased retirement
Pension income can help you reduce working hours gradually.
Rather than moving from full-time work directly to full retirement, some people use pension income to replace part of their salary while reducing working hours.
Maintain spending
Pension withdrawals can potentially replace part of the earnings lost when hours reduce.
Delay larger withdrawals
Continuing to earn can mean less needs to be taken from pension savings in the early years.
Keep employer contributions
If you remain in employment and eligible for the workplace pension, employer contributions may continue under the scheme rules.
Test retirement spending
A phased transition can provide a practical way to see how your expected retirement budget feels before stopping work completely.
Planning the overlap
Coordinate earnings, pension withdrawals and contributions.
What do you need?
Only take pension income that serves a clear spending or planning purpose.
What tax band are you in?
Check the combined effect of employment income and pension withdrawals.
Will you keep contributing?
Confirm whether the planned withdrawal triggers the MPAA before taking taxable flexible income.
What happens when work stops?
Model the later point when salary disappears and State Pension or other retirement income begins.
How is the remaining pension invested?
If money stays invested, the strategy should reflect both withdrawals and the remaining time horizon.
Do you actually need to access it yet?
Continuing to work can sometimes mean pension benefits can remain invested for longer.
Phased retirement planning
Thinking about reducing work rather than stopping altogether?
A retirement plan can coordinate salary, pension withdrawals, workplace contributions, State Pension and tax as you move gradually from work into retirement.
Book a conversationThis guide is for general information only and is not personal financial or tax advice. Pension, tax and National Insurance rules can change and scheme rules differ. Content checked against current GOV.UK and MoneyHelper guidance on 15 September 2026.