ACCA Advanced Taxation (ATX) Practice Exam

At what minimum age can individuals start withdrawing from their personal and workplace pensions?

1. 50 years old

2. 55 years old

3. 60 years old

4. 65 years old

The correct answer is: 55 years old

Individuals can start withdrawing from their personal and workplace pensions at the minimum age of 55. This age was established to provide a balance between allowing individuals access to their retirement savings earlier, while also encouraging them to save for retirement. The increment in the minimum age from previous years reflects changes in pension regulations as well as trends in life expectancy and retirement planning. Opting to withdraw from pensions at 55 enables individuals to access funds earlier in their retirement planning, potentially providing more flexibility in managing their finances if they choose to retire or transition to part-time work. However, it's important for individuals to consider the long-term implications of withdrawing their pension funds early, including tax repercussions and the impact on their future retirement income. While the other options suggest different ages at which withdrawals can begin, they do not align with the current regulations that specifically state the minimum age for tapping into personal and workplace pensions is 55.