Workers To Wait Longer To Access Private Pensions

The government may be hatching plans to raise the minimum age for retirement savers to access their cash as the state pension age rises.

Pension savers can start taking money from their funds once they hit the age of 55.

The government has previously set the 10-year gap for changing the state pension age – which means everyone gets at least a decade’s advance warning before the age is raised.

But no such promise has been forthcoming about the minimum pension age – only an announcement in 2014 stating the age will rise to 57 years old in 2028.

This measure would require a change in legislation that has so far not been forthcoming – and remains unmentioned by the government in the current law-making schedule before Parliament covering the next two years.

Link pension ages together

Advisers and pension providers are concerned that the limit might be hiked  when the state retirement age goes up to 66 by October 2020.

After that, the government has hinted the state pension age will go up to 68 by 2039.

Industry figures feel the government should link the minimum retirement age to the state pension age so retirement savers have a 10-year warning before any changes take place so they can make plans.

The minimum retirement age impacts all UK pensions – including expat SIPP and offshore QROPS.

Steve Cameron, director of provider Aegon, agrees any pension age changes should be revealed well in advance.

Disruptive to pension planning

“The government has committed to giving people at least 10 years’ notice of any further increases in the state pension age. This principle should also apply to communicating any increase in the earliest age for accessing private pensions,” he said.

“To date, the government has not indicated any change to the minimum access age when the state pension age begins to increase to 66 starting next year. Changing the rules at such short notice would be hugely disruptive to the plans of thousands of individuals and would be highly unpopular.”

Cameron explained the state pension age is increasing in line with life expectancy and the trend that people are working beyond the age of 65, so increasing the minimum retirement age in line with the state pension age makes financial sense.

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