The age at which pension savers can access their pot freely, is set to increase from 55 to 57. The change, which is due to come into force in 2028, will affect most people approaching retirement. This will mean that from 2028, those under 57 will not be able to access their pensions without incurring a tax penalty. There are exceptions, however, notably people forced into retirement by bad health as well as firefighters, police and the armed forces.
Pension savers have until April 2023 to review their current pension provider rules and understand if they can still gain access to their pension at 55, should they choose to do so. It is hoped that the ‘cut-off’ point of April 2023 should give people enough time to organise their finances and plan ahead, as it may also mean switching providers for better investment performance, lower charges or even access to a wider range of funds.
The urgency of being given time to plan ahead financially has been highlighted by DWP failings in the past. Thousands of women born in the 1950s were not adequately notified of changes affecting the age they could attain their state pension, leaving them totally unprepared.
This date was chosen to align with the state pension age increase from 66 to 67 which is due to take place in a phased transition between 2026 and 2028. The government has also stated an intention to increase the state pension age to 68 between 2044 and 2046.
You can check your state pension age online and obtain a forecast of your state pension entitlement.
For help with your retirement planning and ensure you are prepared, please contact us. Your first meeting with us is without obligation and no cost to you.