Compare the lifelong position, not only the first payment
Ill-health retirement can involve different tests, tiers and benefits. A quote should be read alongside survivor benefits, tax, other income and the possibility of returning to work.
Your pension decision pack
Keep each scheme separate if you have more than one.
- Scheme type, membership dates, normal pension age and ill-health rule.
- The medical test, decision-maker and evidence required by the scheme.
- Any tiers based on ability to do your job or other work.
- Gross pension, lump sum, index-linking and survivor or dependant benefits.
- Effect of taking benefits now on future growth, death benefits and later options.
- Tax, means-tested benefits and possible social-care charging implications.
- Appeal or review deadline if the medical or scheme decision is refused.
Questions before signing
Ask the scheme to provide illustrations rather than verbal estimates.
- Which definition of incapacity applies and who decides whether it is met?
- What would I receive under each available tier or option?
- Can the award be reviewed or stopped if health or work changes?
- How are serious-ill-health lump sums and life expectancy rules handled?
- What regulated financial advice may be needed before transferring or giving up guarantees?
Request a complete comparison
Ask for survivor benefits and tax to be visible.
“Please provide written illustrations for each ill-health option, including pension, lump sum, survivor benefits, review conditions and what I permanently give up by taking it now.”
Compare the scheme’s options before making an irreversible choice
Ill-health retirement is not one national benefit. Each workplace or personal pension applies its own rules, medical test and calculation, and taking money can affect tax, benefits and future income.
List every pension before deciding anything. Defined-benefit schemes may offer different levels of ill-health pension depending on capacity for work. Defined-contribution schemes provide a pot and may have separate serious-ill-health terms. A diagnosis alone does not establish either test.
Ask the scheme administrator for the governing rules, evidence process, figures and review or appeal route. Request projections that show annual income, lump sums, inflation treatment and survivor benefits, not only the largest immediate payment.
Leaving employment, drawing a pension and claiming insurance are separate decisions that can affect one another. Get a benefits check and, for regulated choices, appropriate pension advice before signing. Be wary of anybody proposing early access outside the scheme’s authorised route.
A practical way through it
Use the parts that fit your situation and leave the rest.
- Find every schemeCheck current and former employers, personal pensions, salary records and the official pension-tracing route. Record administrator and membership details.
- Request the actual rulesAsk for the ill-health and serious-ill-health provisions, medical criteria, decision-maker, evidence required and current appeal process.
- Gather functional evidenceExplain how health affects the work defined by the scheme. Supply clinical facts without asking a doctor to promise a legal or scheme outcome.
- Compare written figuresRequest income, lump-sum, survivor-benefit and inflation information for each available option, including what happens if the application is refused.
- Check linked consequencesReview tax, means-tested benefits, care charges, insurance and employment status before choosing a payment or leaving work.
- Use specialist adviceUse Pension Wise where eligible for defined-contribution guidance and a regulated adviser for recommendations or complex transfers.
What this can look like
When two pension options sound similar
Rob is offered a lower-tier ill-health pension and an alternative transfer value. The transfer figure looks larger than the first year’s pension, so he is tempted to decide immediately.
A safer comparison
Rob asks for lifetime illustrations, inflation rules, spouse benefits and the medical reasons behind the tier decision.
He checks whether leaving the scheme or transferring would end any right of appeal or insured benefit.
He takes the full papers to a regulated pension adviser and a welfare-rights adviser before accepting either route.
Check every scheme
- Ask each provider for its ill-health rules, evidence test, figures and appeal route.
- A cancer diagnosis does not automatically meet a scheme’s incapacity test.
Compare the consequences
- Request figures for retirement income, lump sums and survivor benefits.
- Check tax, benefits, care-cost and return-to-work effects before taking money.
Get specialist help
- Use Pension Wise or regulated advice for defined-contribution decisions.
- Ask providers about serious ill-health rules when clinically relevant rather than assuming tax treatment.
A manageable next step
What you could do now
- List every workplace and personal pension.
- Request written ill-health options and figures.
- Get benefits and regulated pension advice before choosing.
Checked sources
Read the original guidance
We summarise carefully and link to the source so you can check the full, most current information. Sources were checked 9 September 2026.