Private pension age rise to 57: Hopes of early retirement dashed as ministers raise minimum age

Anyone hoping for an early retirement has suffered a blow after ministers said they will press ahead with raising the minimum pension age from 55 to 57 in 2028.

It means those currently aged 47 and under will not be able to access any of the money they have saved into pensions for an extra two years.

This does not affect when the state pension can be claimed.

In a statement yesterday, Treasury minister 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.

‘That announcement set out the timetable for this change well in advance to enable people to make financial plans and will be legislated for in due course.’

Aegon pensions director Steven Cameron said: ‘It’s now imperative that both Government and industry make sure this change is clear to all those saving in pensions.

‘We can’t afford a repeat of the Government communication gaps which left many women to find out too late that their 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.

This means those currently aged 47 and under will not be able to access any of the money they have saved into pensions for an extra two years

The first 25 per cent you take out is tax-free, letting people clear debts, buy cars, get work done on their home or pay off mortgages.

You can withdraw more than 25 per cent, and make as many or as few withdrawals as you like once you are 55, but the money is then taxed as if it was income. 

Pension pots of £30,000 or less can be cashed in without being taxed.