Government confirms plans to raise the age individuals are allowed to access their private pensions from the current age 55 to 57 by 2028
In a written question to the Treasury, Labour MP for East Ham Stephen Timms asked what plans the government has to increase the minimum age at which people can access their private pension under the tax rules.
In response, Economic Secretary to the Treasury and City minister John Glen confirmed plans first announced in 2014, which would increase the minimum pension age to 57 from 2028.
Glen said the move would be legislated for "in due course", but did not give any further insight on when this might be.
The change means people will now have to wait two more years before being able to access their pension savings.
Protection adviser Rob McMurrich at Roxburgh Financial Management said: "While clients will very often aspire to retire early and if 55 represented that aspiration, we would not bank on it as far as protection planning goes. Having a term on an income protection policy to the more realistic age of 60 would in most cases be appropriate so we could manage any amendments to the plan, whether that be government intervention or lifestyle. Changes to legislation such as the access age to retirement funds simply highlights the need for holistic advice, cash reserves, a diversified approach to planning and allowing tolerance for change."
Quilter head of retirement policy Jon Greer said the change will, however, come as a blow to those hoping to retire at 55.
"A few diligent pension savers are lucky enough to be able to afford to retire at 55 with a pension pot sufficient to last the rest of their lifetime. But in future that age will switch to 57 before savers can unlock their tax free cash and income from a retirement fund," he said.
"Designed as a safety valve in the pension system, the minimum age for accessing a pension is intended to prohibit people from withdrawing too much of their pension too soon. Part of the trade-off for receiving pension tax relief and the perk of tax free cash is that savers have to commit to keep their money locked up till their mid-50s."
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