Private pension age could rise to 58 faster than expected – will you be affected?

THE minimum age that you can take out your private pension could rise to 58 faster than expected, experts say. Adults can currently access their private or workplace pensions from the age of 55, and it’s set to rise to 57 in April 2028. Experts now believe it could rise again to 58 by the late 2030s. That’s much sooner than the current timeline, which would see the private pension age go up in the mid-2040s. Sign up for the Money newsletter Thank you! The Government generally tries to keep the private pension age 10 years below the state pension age. This is so retirees don’t run out of pension savings by the time they hit state pension age. Get FREE pension advice and boost your pot by £1,000s *If you click on this link we will earn affiliate revenue Sticking with your current provider could cost you thousands of pounds in retirement. That’s why Pense is offering free pension advice for people with pots of all sizes – whether it’s a drawdown or annuity. Speak to one of their specialists to get a detailed breakdown of your options. Book your free consultation NOW Pense Ltd is authorised and regulated by the Financial Conduct Authority number 231629. The state pension is given to all retirees who have made National Insurance contributions during their working lives, while private pensions are made up of either workplace schemes or an individual’s retirement savings. That means it’s assumed the private pension age will rise to 58 when the state pension age hits 68. Current Government legislation has set a timetable for the state pension to increase to 68 by 2044-46. But this is currently under review, and a recent report from the Government’s spending watchdog, the Office for Budget Responsibility, recently said it expected the state pension to rise faster. Most read in Money It said it believed the minimum age would increase to 68 between 2037 and 2039 – around seven years earlier than originally thought. This is not Government policy right now but the Treasury has not ruled it out. LCP partner and former pensions minister Steve Webb told The i Paper: “In theory, in 2037 – or realistically 2039, because that’s when we actually get to 68 – the private pension age could go to 58.” He said it was also “perfectly plausible” for the private pension age to rise even further to 60. “There is a possibility that the private pension age could move up faster than the state pension age,” he said. Tom Selby, head of retirement policy at AJ Bell, told the paper that linking the state and private pension ages “has been seen as a sensible step to ensure people don’t access their private pension too early and run out of money“. He said future increases would mean younger generations have less flexibility over when they can access their savings. But he said this would still be relatively young for healthy adults. A report last year by the Pensions Commission suggested people may need to work for longer to build up adequate savings for their retirement. It had warned that retiring at 57 compared with 65 could reduce the average saver’s annual workplace pension by nearly £9,000 a year. The Pension Commission’s final report is due by early next year and will make recommendations on how to improve the adequacy on people’s retirement savings. The Treasury has said it does not comment on “speculation” on tax policy. Comment now