Staying in work

Learn about the rules and tax implications of staying in, or returning to work, after taking your DB pension.

Working while taking your pension

You may decide to keep working when you start taking your pension. Or you might want to go back to work once you retire.

Read on to understand the rules and tax implications for both options. 

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Staying in work while taking your pension

If you're not ready to retire then you may be able to keep working and could still start taking your pension at any time from age 55, up to age 75.

You will not be able to continue working and start taking your pension before age 55, even if you have a Protected Pension Age (PPA).  This is in line with pension law.  See the PPA information below.

If you take your pension before your Normal Retirement Age (NRA), your benefits will be reduced as they will need to be paid for longer. If you stay in work, your pension is likely to be reduced significantly more than if you left work and took immediate payment of your benefits. 

Visit the when to retire page for further information about your NRA and the impact of retiring early or late.  

You can also find more information in your Member Guide.

The wider implications of staying in work while taking your pension

Whether you decide to stay in work or not, taking your pension may have an effect on lump-sum death benefits and ill-health benefits. 

Taking your pension while you're still working may also have an impact on the amount of tax you pay, particularly if your total income, including pension payments and wages, is over the Personal Allowance.

Visit the government website for more information about your Personal Allowance and Income Tax rates. 

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Speak to your employer about staying in work while taking your pension

In some cases you may have to get your employer’s permission if you stay in work and want to start taking your pension.

When you start taking your pension you give up your right to be an active member of your Section. If you’re still working your employer may let you re-join the Scheme or give you the opportunity to join a different workplace pension.

Please contact your employer to find out if this could be an option and if you have any questions or are considering applying for your pension while staying in work.

Retiring and returning to work

If you retire and start taking your pension, you can still decide to work again at a later date. 

In most cases, as long as you start taking your benefits after age 55 then there will be no restrictions on you working for any employer in the future. Any pension payments you are getting from the Scheme at that time won’t be affected.

If you retire due to ill-health, are under your NRA, and you start working again, your incapacity pension may be impacted. Read more about ill-health retirement on the when to retire page.

The implications of returning to work once you start taking your pension

By taking your pension, you will no longer be considered an active member of the Scheme. That means you won’t be paying in and may not be entitled to any lump-sum death benefits or ill-health benefits, even if you start working again.

If you do go back to work, your employer may let you re-join the Scheme or give you the opportunity to join a different workplace pension. This would need to be discussed with your employer directly.

Working while taking your pension may also have an impact on the amount of tax you pay, particularly if your total income, including pension payments and wages, is over the Personal Allowance.

Visit the government website for more information about your Personal Allowance and Income Tax rates.  

The impact of a Protected Pension Age (PPA) 

If you were an active member of the Scheme on 5 April 2006, you may have a Protected Pension Age (PPA) of 50. This gives you the right to apply for your pension from age 50.

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PPA guide

For more information about the Protected Pension Age (PPA) and the rules that apply, please download the Protected Pension Age Read as You Need guide. 

 

If you have a PPA and opt-out, you will lose this right and wouldn't be to apply to take early retirement until at least age 55. 

If you have a PPA and rely on this to apply for your pension between the ages of 50 and 54, you must;

  • Leave work, and;
  • Take all your Scheme benefits (including DB and IWDC) at the same time.

If you leave work and start taking your pension before age 55, there are certain requirements you must follow if you want to return to work. If you don’t follow these requirements then you could face a large tax bill.

If you were a member of the Railways Pension Scheme after 5 April 2006 but before 4 November 2021 and were born before 6 April 1973, you may have a Protected Pension Age (PPA) of 55. That means the earliest you can claim your pension is 55.

If you joined as a new entrant on and after 4 November 2021 and were born after 5 April 1973, you won’t have a PPA and the earliest you can claim your pension is 57.

Who to contact about working while taking your pension

If you are thinking about staying in work and applying for your pension, you should speak to your employer in the first instance.

You might also want to consider taking independent financial advice about your pension options and possible tax issues before you make a decision.

Visit the Guidance and Advice page for help finding a financial advisor.

If you want to know more about your options...

You can find a summary of all your retirement options in the Read as You Need guide below.

If you're already taking your pension...

Visit the I’m already taking my pension area if you’re already taking your pension and want to know more about continuing, or returning to, work.

What to read next...

When to retire

Find out when you can start taking your pension in line with Scheme rules.

Making the right decision

Things to consider before deciding how and when to take your DB pension. 

Guidance and advice

Where to go for further support on your options.