If you have been working for years and the grind of the daily commute is starting to wear on you, it’s only natural to begin contemplating retirement.

But working out exactly when to go can be tricky. There is no one size fits all retirement age, and instead, the decision very much depends on your personal circumstances.

Some may feel pushed to take action to keep one step ahead of Government changes – although experts warn this can be a bad idea.

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Rachel Vahey, head of public policy at AJ Bell, said in the run-up to the Budget, the firm saw some of its customers access their pension tax-free cash amid speculation the Chancellor was about to slash the allowance.

She said: “Those fears proved unfounded. Instead, it’s always best to make this big financial decision based on your situation rather than listening to rumours.”

So how do you know if 2026 is the right time? The i Paper speaks to experts to find out.

The pros of retiring in 2026

Annuities are thriving

Annuity rates have hit a 17-year high, with many saying now is one of the best times to lock in a deal.

The very best annuity rates were seen in early summer and have edged lower since. But, aside from that peak, they remain higher than at any point in the past 17 years.

A 65-year-old with a £100,000 pension can get up to £7,718 from a single life level annuity with a five-year guarantee, according to Hargreaves Lansdown’s latest annuity search engine.

Craig Rickman, personal finance expert at interactive investor, said: “Whether 2026 is a good year to retire depends on your personal circumstances and aspirations in later life, but there are broad reasons to be optimistic.

“Annuities remain attractive despite falling interest rates and stock markets are currently buoyant.

He added: “A key approach for anyone aiming to retire next year is to weave flexibility into your retirement plans and consider how you would react in the face of lower annuity rates and stock market volatility – both of which are possible in 2026.

“You can’t predict what happens in the future, but you can take steps to protect your savings from unfortunate events.”

Getting ahead of rule changes

Some workers may see 2026 as a chance to retire before new pension rules take effect.

With the state pension age rising – from 66 to 67 over the next two years – and inheritance tax (IHT) rules tightening in 2027, retiring earlier can offer certainty before these changes start to affect income or estate planning.

Yet, despite rumours ahead of the Budget, it saw no changes to pension tax rules on withdrawals, meaning you can still take 25 per cent, capped at £268,275, of your total savings without HMRC taking a penny.

Higher state pension from April

A 4.8 per cent rise in April will take the state pension to about £12,548, with the triple-lock remaining in place.

This makes sure payments keep pace with earnings and inflation and boosts the guaranteed income people can factor into a 2026 retirement, making affordability calculations clearer.

Private pensions still accessible at 55

Currently, savers in the UK can start taking from their private pension pots from the age of 55, but this is rising to 57 from April 2028.

Retiring in 2026 means people can still access their pots under the current, more flexible age threshold, Vahey said, giving them earlier control over their income.

She also recommended that those who have several pensions combine them together before they retire to make them “easier to manage”.

Cons of retiring in 2026

State pension access could be delayed

The state pension age is rising to 67 over the next two years. If you turn 66 before 6 April, you will not be affected, but anyone reaching 66 later in the year may have to wait longer.

Rickman explained: “If you were born on 31 July 1960, your state pension age is 30 November 2026.

“Given that from April the annual full state pension will pay around £12,500, every additional month you have to wait equates to around £1,000, so make sure you factor this into your retirement plans to avoid an unwanted shock.”

Defined benefit pensions may be cut if taken early

Defined benefit (DB) schemes pay a guaranteed income for life, usually linked to your salary and length of service.

But that guarantee only applies at the scheme’s normal pension age. If you retire in 2026 and take the pension earlier than that, the scheme will typically reduce the income to reflect the fact that it will be paying out for longer.

Vahey said: “If you have a DB pension and are considering retiring earlier or later than the scheme pension age, your income may be adjusted down or up, as appropriate. It’s best to ask your pension scheme for the details.”

This is a clear drawback, because even a modest early-retirement reduction can permanently shrink a DB pension and significantly affect long-term income – especially once inflation and longevity are factored in.

IHT rules tighten in 2027

One of the biggest tax changes on the horizon is the shift in how pension pots are treated after death.

From April 2027, unused pension funds will be included in calculations for IHT – which is charged at 40 per cent.

At the moment, pensions are typically outside the IHT net, which is why many people use them as a way to pass on wealth tax efficiently.

But bringing untouched pension money into IHT means larger estates could face higher tax bills unless funds are spent or gifted more strategically.

For someone retiring in 2026, this is not an immediate hit – but it lands just a year later, meaning retirement plans, drawdown strategies and estate planning may all need rethinking much sooner than expected.

Rickman highlighted the importance of keeping on top of things as retirement edges closer, “especially as economic conditions can shift quickly and pension rules aren’t set in stone”.