interactive investor on rise of private pension age to 57

We look at what retiring later will mean for you.

Moira O’Neill, Head of Personal Finance, interactive investor says: “We have known for several years that the private pension age would be linked to increases in state pension age, moving to 57 in 2028 – and now this has been confirmed. 

“But any increased restriction on access flies in the face of pension freedoms and feels like an extra kick in the teeth at a time when many people are reassessing their work/life balance after a terrible year socially, emotionally and economically.

“Not so long ago, the private pension age was 50. Most of us have long accepted that we are probably going to have to work for longer than we might have liked – but it’s always good to have the option of retiring sooner. Whilst there is eight years to plan, the change could prevent some couples from enjoying retirement together. Many might have an older partner and wish to retire at the same time.

“Our research shows that retirement is no longer a cliff edge and many people scale back work life more gradually, some switching careers, or even starting up new businesses. They may want to access a small part of their pension at an earlier age to do this, while keeping the bulk of their nest egg for later life.   

“It highlights the need to use ISAs alongside pensions. Those with ISAs will have more flexibility to plug the two year gap in income as a result of reduced access. As for the Government – these changes need to be well communicated so we don’t end up in another WASPI situation. People need time to digest the news and plan ahead to fill the gap, if they can.”