Retirement Goal Posts Set To Move Again For Millions Of Workers

The government is about to move the retirement goal posts again to leave millions working up to two years longer before they can draw a pension.

Chancellor Rishi Sunak is tipped to raise the minimum pension age from 55 to 57 years old in Budget 2020.

The Treasury is pushing for the change because Whitehall mandarins fear too many retirement savers are cashing in their savings too soon.

The call is also backed by pension provider trade body the Association of British Insurers.

Government plans presented by former Chancellor George Osborne scheduled lifting the age to 57 in 2028, when the age for receiving the state pension goes up to 67 years old from 65.

Pension freedom age set to rise to 57

Current rules offer 55 year olds the freedom to draw on their pension savings.

Former pensions minister Steve Webb argues changing retirement deadlines can seriously impact people’s financial planning.

He also pointed out the government generally gives 10 year’s notice of such changes.

“Ministers should not rush to accelerate that timetable. People need time to plan their finances and a sudden change could cause real problems,” said Webb.

“There is very little evidence that people are using the new pension freedoms to recklessly blow their life savings at 55.

Call for a more creative approach

“A more creative approach might be to explore whether individuals should be able to access their tax-free cash at 55 whilst leaving the rest in their pension if they wish to do so.

Raising the age to access a pension seems a done deal, according to a Treasury spokesman.

“The announcement of the minimum pension age rise to the age of 57 in 2014 set out the timetable for this change well in advance to enable people to make financial plans, and we will announce next steps in due course,” he said.

The state pension age for men and women rises to 66 years old by October 2020, and is set to rise to 67 by 2028.

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