If you’re 55 or over and wondering whether it’s too late to open a pension — the answer is no, it’s not too late. In fact, starting a pension later in life can still offer valuable tax benefits and income for the future, even if you’re just a few years from retirement.
Here’s what you need to know about opening a pension later in life, how it works, and what to consider.
Can you open a pension at 55 or older?
Yes — you can open a private pension at any age, including after 55. This could be a personal pension, a self-invested personal pension (SIPP), or even continuing to pay into a workplace scheme if you’re still working.
You can usually begin accessing a private pension from age 55 (rising to 57 in 2028), but you don’t have to withdraw right away. The longer you leave it untouched, the more time it has to potentially grow.
💡 Read more: What to do if you haven’t saved enough for retirement
Why start a pension after 55?
Even if retirement is close, there are still key benefits:
- 25% tax-free lump sum: You’ll still be entitled to this when you begin withdrawing.
- Tax relief on contributions: For every £80 you pay in, the government adds £20 — a guaranteed 25% boost.
- Flexible access: Many pensions allow you to access your savings in stages, not all at once.
How much can you contribute?
You can still pay in up to £60,000 per year (or 100% of your income, whichever is lower), and receive tax relief.
However, if you’ve already started drawing income from a pension (beyond the 25% tax-free portion), a lower Money Purchase Annual Allowance (MPAA) of £10,000 per year may apply.
What if you’re already retired?
Even if you’re retired or semi-retired, you can still:
- Open a pension if you have some earnings
- Transfer old pensions into a new scheme for better control or fees
- Delay withdrawals to let the pot grow
You won’t get tax relief if you don’t have taxable income, but you can still benefit from consolidation or inheritance planning.
💡 Also read: Should you take your pension as a lump sum or regular income?
Tips if you’re opening a pension later in life
- Start with what you can afford — even small amounts add up
- Consider a SIPP for more control if you’re comfortable investing
- Don’t delay — the sooner you start, the more potential growth
- Shop around for low fees and good customer support
Final thoughts
It’s absolutely not too late to open a pension at 55 or older. While earlier is better, starting now can still improve your retirement income, unlock tax advantages, and give you more financial flexibility in the years ahead.
