Typically, when we speak to younger clients, to retire at 55 feels like a good plan. Perhaps this is because their work is demanding, and they can’t imagine “keeping going” at that sort of pace for years on end.
Last week the Government confirmed that the normal minimum pension age will rise from 55 to 57 in 2028. This was originally mentioned back in 2014 and we’ve been including it in our documentation for years, as a little warning that the rules could likely change.
Why have they done this? Essentially to reflect the trends in longevity (and because they’ve increased the State Pension age) they want more of us to stay in work whilst ensuring our pensions also have longevity and sustain our lifestyle over a longer period. Basically, they don’t want us to retire, run out of cash and be dependent on the State!
If you are age 47 and under, this will affect you unless you are in ill health/have a protected pension age/exempt specified occupation.
What does it mean?
- You won’t be able to draw your private pension savings without a hefty tax charge.
- If you still want to stop work altogether, you’ll have to “bridge the gap” from other assets/savings until you reach 57.
We know how important financial planning is. The change in pension age has made the need to plan even greater. Get in touch if you need help with this.