BUSINESS owners and entrepreneurs considering early retirement should act immediately if they want to avoid a long wait to dip into their pension pot.

From April 6 2010, pension scheme members will no longer be able to take their benefits at age 50 as the minimum pension age increases to 55. More than four million people between the ages of 50 and 54 are potentially affected – anyone born between April 6, 1955, and April 6, 1960.

The new rules will affect people who are planning on phasing their pension benefits with a drawdown arrangement. After April 6 individuals will be unable to take instalments until they reach 55, unless they are already drawing their pension before the deadline. This also creates a dilemma for someone planning to pay off a mortgage with a tax-free lump sum from their pension commencement.

Anyone thinking they might like to take their pension benefits before 55 should act now or face the imposed delay, the worst case scenario being a five year wait for those who have just turned 50. In many cases the application deadlines being demanded by pension providers are much earlier than the 6 April deadline because the process takes so long.

Those affected by these changes should speak to their professional advisor as soon as possible to mitigate any issues with their retirement planning and to decide whether early retirement is really the best option for them.