The 'gap years' are the time between when you stop working and when your State Pension begins at 67. Retire at 57 and that gap is about ten years you must fund entirely yourself — normally from ISAs (accessible at any age) and, from 57, a private pension. Getting the order and the tax right is what makes an early retirement affordable.
How long is the gap?
It is the years between your retirement date and your State Pension age. State Pension age is 66, rising to 67 — the increase is phased by date of birth and completes in March 2028, so yours depends on when you were born (check it on gov.uk). Retire at 57 and the gap is roughly ten years; retire at 60 and it is about seven. During the gap there is no State Pension income at all — the full new State Pension (about £12,548 a year in 2026/27) only starts once you reach State Pension age.
What fills the gap
Two pots do most of the work:
- ISAs — no minimum age, and withdrawals are tax-free, so they are ideal for the earliest years and for topping up income tax-efficiently. See ISAs explained.
- Pensions — from 57 (from 2028) you can normally take 25% tax-free and draw the rest as taxable income. See SIPPs explained.
Getting the tax right
In the gap years you often have little or no other taxable income, which means your personal allowance (the amount you can receive before income tax) may be unused. A common approach is to draw some taxable pension income each year to use that allowance, and top up the rest from tax-free ISA savings — rather than taking everything from one pot. This can lower the tax you pay across the gap. The right blend depends on your numbers; MoneyHelper is a good free starting point, and this is a sensible thing to take advice on.
Sequencing your withdrawals
There is no single right order, but two ideas guide most plans: use your tax allowances each year rather than wasting them, and leave money that grows tax-advantaged (like pensions, which can also be very efficient to pass on) invested where sensible. Drawing purely from ISAs first is simple; blending ISA and pension income is often more tax-efficient.
The gap years are the heart of an early-retirement plan. Line up enough accessible savings to cover them, use your allowances, and the stretch from 57 to the State Pension at 67 becomes a schedule rather than a worry. Next: how many years of spending to hold in ISAs.