Should you draw more from your pension before State Pension age?

01 Why a flat withdrawal is the wrong shape

The State Pension arrives on a fixed date and does not care what your portfolio is doing. Before it, the portfolio funds everything; afterwards it funds the gap. A withdrawal that is constant across both periods produces total income that jumps by the whole State Pension on one day.

That jump is usually unwanted — spending does not step up at 67 — and it is inefficient. In the bridge years the personal allowance is often unused, and after the State Pension starts it is largely consumed.

Matching the withdrawal to the shape of the guaranteed income gives a level total income and moves taxable withdrawals into the years where they are cheapest.

The same logic applies to any other income that starts on a known date. A defined benefit pension with a normal pension age of 65, an annuity bought to start at 70, or a rental income that begins when a property is let — each of them creates a step in guaranteed income, and the portfolio withdrawal should step down to match rather than staying flat across it.

Source: Plan your retirement income

02 The tax arithmetic

In the bridge years, £12,570 of taxable pension income can be taken with no Income Tax at all if there is no other income. Once the State Pension starts, it uses most of that allowance, and further withdrawals are taxed from close to the first pound.

Nine bridge years at a full allowance is over £113,000 of income that could have been taken untaxed. A flat withdrawal that leaves part of the allowance unused in those years and then pays 20% on the same money later is paying for the privilege of a tidy spreadsheet.

Pairing the taxable income with phased tax-free cash increases the untaxed amount further, which is what makes a substantial bridge income achievable with no tax at all.

On the defaults above, the worked example shows £22,586. Front-loading pays £31,374 of tax across the bridge; drawing the same amount alongside the State Pension later would cost more, because the allowance is already used by then.

Source: Income Tax rates and Personal Allowances

03 The risk it creates

Front-loading withdrawals means taking more from the portfolio in exactly the years when a market fall does the most permanent damage. That is a real cost and it should be acknowledged rather than assumed away.

Two things mitigate it. The withdrawal steps down permanently when the State Pension starts, so the elevated rate is temporary rather than a higher long-run rate. And holding the bridge years in cash or short-dated assets removes the forced-selling mechanism for that period specifically.

The combination — front-loaded withdrawals funded from a de-risked bridge allocation, with the long-term portfolio left alone — is the structure that makes this work rather than the withdrawal shape on its own.

It is worth being precise about how much extra risk front-loading actually adds. The elevated withdrawal lasts for the bridge years only and is then permanently lower, so the average withdrawal across the whole retirement is unchanged. What changes is the timing, and the timing is what sequence risk cares about — which is exactly why the bridge years are the ones to hold in cash.

Source: Retirement income market data

04 Making the step down happen

The plan only works if the withdrawal actually falls when the State Pension arrives. A household that keeps drawing the bridge amount after 67 is spending the State Pension on top rather than instead, and the portfolio does not survive that.

The mechanism is simple and it has to be deliberate: reduce the standing withdrawal instruction in the month the State Pension starts, not later. Putting a diary note against the State Pension date is the whole implementation.

It is also the moment to reassess the withdrawal rate, because the portfolio's job has changed from funding everything to funding a gap — and the sustainable rate on the remaining pot is different as a result.

Source: Check your State Pension age

05 Setting the numbers

Work out the annual spending. Subtract the State Pension you will receive to get the post-bridge withdrawal. The bridge withdrawal is the full spending figure. Those two numbers are the plan.

Then check the bridge is affordable: full spending times the bridge years has to come from accessible assets, and the normal minimum pension age constrains what is accessible before 57 from 2028.

And check the National Insurance forecast, because the post-bridge withdrawal depends on the State Pension actually being the amount you assumed.

Finally, model the plan with the State Pension starting a year later than you expect. Reviews of State Pension age have only ever moved in one direction, and a bridge that is nine years rather than eight is a materially larger sum. Building the plan on the more demanding assumption costs nothing if it turns out to be wrong.

Source: Check your State Pension forecast