The short answer to this is ‘As soon as you can afford to’ but realistically this is likely to depend on at what age you started saving and how much of your earnings you save over your lifetime.
The amount of income your pension savings can generate depends on a number of factors, but one of the most important is your age when you buy an annuity: other things being equal, your annuity will generate much more cash every year if you buy it at age 70 than at age 60.
You will be able to buy an annuity at an age determined by the terms of your pension scheme – no sooner than age 55, according to the law – but the other major consideration when deciding to retire is when you are eligible for the state pension.
This is currently 65 for men, it is also rising to 65 for women by 2018. However the government plans to raise this to 66 for both sexes by 2020. Different ages of people will see this increase happen at different speeds and calculating what your state pension age will be is complicated. For this reason the government offers a free calculator.
Another thing to be aware of when choosing when to retire is that employers can no longer force you to retire at 65.
Lastly, some, mostly public sector, professions allow for earlier retirement than others. These will almost all have their own special pension arrangements taking this into account, which they will have made their staff aware of.
