If you were hoping for early retirement, you may have to wait a little longer. Ministers have said they plan to press ahead with raising the minimum pension age from 55 to 57 by 2028. This means that those currently aged 47 or under will have to wait an extra two years before accessing the money they have saved.
This does not affect when the state pension can be claimed.
John Glen said:
“In 2014 the government announced it would increase the minimum pension age to 57 from 2028, reflecting trends in longevity and encouraging individuals to remain in work, while also helping to ensure pension savings provide for later life.”
Making this news widely available is part of an attempt to avoid a similar situation to the last pension mishap, when women found out, much too late, that the state pension age was increasing from 60 to 65.
Under current rules, when you turn 55 you can spend the money in your personal or workplace pension.
The first 25% you take out is tax-free. This lets people clear their debts, buy cars, assets or get work done, on their homes, or even pay off mortgages.
You can, of course, take out more than 25%, and make as few withdrawals as you need to once you are 55, but the money is then taxed as if it were income.
If you’re worried about what this means for your personal plans, please get in touch with us here.