Does anybody know about bridging pension? Like at what age can it be or ends? I can't find anywhere online

Question

for the comprehensive explanation. This question is link to Retirement planning.

Answer 1

Never come across it before ... unless it's another name for Phased Retirement ... I'll do some research ..

OK, some Company or Private Pension Schemes may contain a "bridging pension" option, which is designed for those taking Early Retirement so as to maintain your income at the same (or similar level) both before and after you get the State Pension.

SO, IF you plan to retire early, ask your Company HR Department if your Company Pension Scheme has a 'bridging pension' option (very few do ..)

It works like this .. say you choose to retire at 60. Well (currently) you will have to wait 5 years (untill age 65) before getting the State ('old age') Pension (approx £5,000 a year) ..

Your Company Pension might pay a Pension of (say) £7500 a year .. so for the first 5 years your income is £7,500 and then, once you reach 65, (and get the additional £5,000 from the State Pension) your income goes up to £12,500

Well, if your Company Scheme has a 'bridging option', they might offer you (say) £10,000 for the first 5 years (until you get the state pension) but only £5,000 thereafter .. in other words, your income stays at £10,000 all the time.

The advantage to you is you get extra cash whilst you are young enough to enjoy it .. the disadvantage is that your 'final' (after 65) income is lower ..

All Pension payments are taxable (and HMRC has rules on how much can be offered) see PDF's at the links below ..

NOTE NOTE NOTE - State Pension age may change in future, as may the legally permitted Early Retirement age .. the BEST thing you can do is put as much as possible into your Pension Plan as early as possible ..

If you are already earning sufficient to pay 40% Tax, you should consider contributing ALL your 40% band earnings into your Pension Scheme (so as to get the 40% Tax relief) ..

Sooner (rather than later) it is likley that Pension contribution Tax relief will be limited to 20%, so anyone who didn't get the 40% relief now will soon be kicking themselves ...

Answer 2

A pension bridge is a temporary income paid in addition to regular pension payments OR before regular payments commence to coincide with goverment pensions or to allow for an early retirement if desired.

It provides flexibility to the retirement planning process.

The amount and duration of the bridge will vary from pension to pension and can be completely different based on the pension you belong to. This information will be disclosed in detail in your pension information booklet available through your employer of your annual pension statement from your provider. (an insurance company)