Pensions and cancer

A pension is money you will use to live on when you retire. If you have cancer you might find it useful to think about your pension options.

There are two main types of pension:

• State Pension
• Private pension 

Can I get my pension early if I have cancer?

You cannot claim your state pension any earlier than your state pension age regardless of your health. You may be able to claim other state benefits.

A company pension scheme (a scheme provided by your employer) normally has its own pension age, typically 60 or 65.  This is the age when you can normally take benefits but you can apply to take benefits earlier due to ill health. This will be a decision made at the discretion of the pension scheme trustees.

A private pension has a minimum age 55 before you can take any benefits. If you have a serious illness that is terminal you may be able to take your pension pot before age 55 as a tax-free lump sum.  A terminal illness is usually defined as a serious illness where your life expectancy is less than one year.

State Pension

The State Pension is paid by the government every week. The age you can get your State Pension depends on when you were born.

There are two types of State Pension:

• basic State Pension
• new State Pension

The type of State Pension that you can claim depends on when you were born and your National Insurance contributions. 

Private pensions

A private pension is a way for you or your employer to save for your retirement. Private pensions can be arranged by your employer or you. There are two main types of private pension.

• Defined contribution scheme - a pension based on how much money is paid in over time. 
• Defined benefit scheme - a pension based on how long you have worked for your employer and your salary. Your employer promises to pay you an agreed amount when you retire.

Pensions can be complicated. It is a good idea to talk through your options with an authorised financial advisor. 

Workplace pensions

A workplace pension is arranged by your employer. A percentage of your pay is automatically put into the pension scheme each month. Your employer might also make contributions to your pension. 

Your employer has to offer a workplace pension scheme by law. If you are eligible you will be automatically entered into it. This is called automatic enrolment. 

Money paid into a pension becomes available when you retire. Most pensions have a set age for when you can take money out from them. It is usually after you're 55. Ask your pension provider what their rules are. 

Cancer and private pensions

There is nothing to stop you arranging a private pension scheme if you have or have had cancer. 

You might have to complete a medical questionnaire. Give details of any existing or pre existing condition to the financial adviser or broker who is arranging the pension scheme.

Find out what would happen under your planned scheme if you could no longer make the payments. For example, you might need to leave your job because of illness, or draw on your pension because of enforced early retirement.

You'll need to shop around with your financial adviser, before making any decisions.

If you were to die before your pension age, choose who you would want to benefit from your pension plan. Tell the people running your pension scheme. You can do this on an ‘expression of wish’ form, which you can get from them. If you don’t do this, it will be up to the Trustees (the people who oversee your scheme) to decide who will benefit.

Buying an annuity

You can use your pension fund to buy an annuity. An annuity is an annual income either for life or for an agreed number of years. 

You buy an annuity from an insurance company and there are many different types. Make sure you discuss the options with an authorised independent financial advisor.

If you have cancer or you have any serious illness you may be eligible for an enhanced annuity rate. When applying for an annuity you must tell them about your illness, as this should give you a higher guaranteed income.

Where to get more advice about pensions

MoneyHelper - Money and Pensions Service 
An organisation set up by the government to give clear, unbiased money advice.
Helpline: 0800 011 3797 (9am - 5pm Monday to Friday)

The Pensions Ombudsman
The Pensions Ombudsman deals with complaints about pension schemes. 
Phone: 0800 917 4487 (10am - 2pm Monday to Friday) 
Email: enquiries@pensions-ombudsman.org.uk

Citizens Advice
An independent network that provides free advice about money, legal issues, housing health and social welfare issues. Often provides advice in English and other languages.
Phone 020 7833 2181 or go to the website to find your nearest Citizens Advice office.