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No Pension until 57?

by | Mar 9, 2021

The Government has pushed forward with plans to block savers from accessing their private pensions until they reach the ripe old age of 57, in a move that could derail the plans of millions who wanted to retire early.

From 2028, savers will have to wait an additional two years before they can dip into retirement savings without triggering punitive tax bills. This means anyone aged 48 and under could be forced to delay retirement as they will no longer be able to spend lifetime savings at age 55.

Plans for the increase were first announced by ex-Chancellor George Osborne in 2014 but were confirmed last September. The Treasury has now set out its strategy to phase in the two-year rise and called on industry experts and the public to respond.

The age at which you can start claiming the state pension is currently 66 but will rise to 67 between 2026 and 2028. The government has previously stated that there should be 10 years between the “minimum pension” age and the state pension. However, as it stands there is an 11-year gap, as anyone 55 and over can access their private pensions.

Workers in the armed forces, police and fire services will be exempt and will be able to access their pension at age 55, under the Government’s proposal. Savers with “protected pension age” where their pension scheme has already promised them, they can take cash at an age below 57 will also be protected from the increase.

The Treasury said the shift reflected longer life expectancy and could encourage people to work longer and save more for their retirement.

Adapted from an article in The Telegraph by Jessica Beard


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