Independent financial adviser, Becky Hammonds of Willow Financial Solutions on Government proposal to increase the minimum age that clients can access their pension benefits from 55 to 57.
New funding options opened up after pension freedom reforms launched in 2015 started allowing over-55s unlimited access to their retirement pots to spend, save or invest them as they wish.
This meant savers were no longer limited to buying annuities, which provide a guaranteed income for life but frequently only at low rates.
Instead, more people opted for invest and drawdown schemes which offer the opportunity to take an income yet still keep growing your savings.
Now, the Government is proposing to increase this to 57 from 6 April 2028.
In the consultation the Government proposes that existing pension holders can have their retirement age of 55 protected for pension benefits in that particular scheme. If the holder transfers that pension to another scheme, the current proposals state that the protected retirement age could be lost.
In addition to this, customers who open a pension after the 11 February 2021 (and who will be 55 after 6 April 2028) will have to wait until they are at least 57 before accessing their pension savings (unless they are taking their pension due to ill-health).
As this is a consultation, it is not yet certain that the Government will go ahead with its proposals as outlined. We will keep you updated as further details are confirmed.
It is vital to plan early for your retirement and start saving at the earliest opportunity.
For pensions and investment advice contact Becky Hammonds on 07969 269677 or email becky@willowfs.co.uk
