The British government has announced plans to raise the age at which pension pots can be accessed from 55 to 57.
The change would mean that millions of Britons in their 40s will have to wait until 2028 at the earliest until they can access their private pension. Britain relaxed pension rules in 2015, since when many have taken advantage of so-called pension freedoms to access their savings early. However, several commentators welcomed the announcements, pointing out the reform will give workers longer to build up their savings.
Anyone under the age of 47 at the moment will be impacted and experts say it is really important that this is communicated well so that we do not see people expecting to be able to retire and access their money, not being able to. While this may be annoying for some pension savers, it does mean that you can spend the extra two years building up your investments and savings to provide even more funds to enjoy in your retirement.
With life expectancy continuing to rise, a pension pot will have to last a lot longer than it once did, around 30 years, as life expectancy is currently 83 for men and 85 for a woman. For those whose mortgages need to be repaid, and were relying on the tax-free cash element of their pension, the advice is to start talking to your mortgage lender as soon as possible. There are options available such as extending the term of the mortgage or loan.
Now is the time to review your pension and if there is an automatic move into lifestyle funds at the age of 55, then you need to consider changing some of this or you could lose out on some investment gains. If you have any concerns regarding this, please contact your Finura adviser.
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