A two-year increase in the normal minimum pension age could impact retirement planning for thousands of people.
Under current rules, personal and workplace pension funds can be accessed from the age of 55. From 6 April 2028, the age limit will rise to 57 years.
This means if you were born on or after 6 April 1973, you will have to wait until after your 57th birthday to access pension-based savings. If you were planning to access these funds before 2030, then you might want to rethink your drawdown strategy.
There are still some circumstances when you can access funds earlier than the normal minimum pension age, for example if you are suffering from ill health or have a protected pension age. Anyone born before 6 April 1971 will not be impacted by the change.
Funding a happy retirement
The pension freedoms that were introduced in 2015 meant the over-55s could dip into their personal pension pots even while they were still working. As a result, the government is concerned that older adults will not have sufficient resources to provide for later life.
A recent study found that the happiest retirees have an income of around £1,700 per month, which equates to a pension pot of around £221,000 at retirement age*. However, 22% of retirees in the UK are living on less than £1,000 a month, which is below the recommended minimum for covering essential costs later in life.
- With 63% of 50-year-old workers worried about the upcoming increase to the normal minimum pension age**, don’t suffer in silence. We can advise on what the changes mean for your retirement planning. Contact us at hello@cailean.co.uk or on 01577 212577.
* How much money do you need to make you happy? L&G, October 2024
** Six in ten 50-year-old workers are worried about the upcoming minimum pension age increase – TPT Retirement Solutions, 2023
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