Pension freedoms age rising to 57

 It has been confirmed that the age at which retirement savers can access their private pensions will increase from 55 to 57 in 2028. 

 

The rule change means that anyone who is currently aged 47 or under will have to wait an extra two years to flexibly access their private pension. 

 

What are pension freedoms?

Introduced in 2015, existing pension freedom rules offer more options to those over 55 when it comes to accessing their pension before retirement. The rules currently offer the opportunity to access 25% of their pension pots without paying tax. 

 

While withdrawing 25% of your pension pot tax-free is nothing new, the options available at the age of 55 have increased. Before the rules came into force in 2015/16, it was a straight choice between buying an annuity or a drawdown product.

 

The changes meant that savers can withdraw smaller sums of cash from their pot in chunks, with 25% of each withdrawal tax-free. Alternatively, it is possible to take the entire pension in one go. The first 25% will be tax-free and the rest will be taxable at the saver’s marginal rate.

 

 

Blog post uploaded 19 Oct 2020