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People may have to wait until they are aged 57 to access their pension pots, under plans reportedly under consideration by the Treasury.
Chancellor of the exchequer Rishi Sunak is apparently considering using the March Budget to announce a hike in the minimum age at which people can access their pensions by two years.
It was already due to rise to 57 (from 55) in 2028, when the state pension age is extended to 67.
The Association of British Insurers (ABI) has lobbied for the increase because it is concerned people will empty their pension pots too quickly without the change.
However, Sir Steve Webb, partner at pension consultants LCP, said he was concerned by the proposals.
“Ministers should not rush to accelerate that timetable,” he told the FT Adviser website. “People need time to plan their finances and a sudden change could cause real problems.
“There is very little evidence that people are using the new pension freedoms to recklessly blow their life savings at 55.”
Alistair McQueen, head of savings and retirement at Aviva, took a different approach, saying that increasing the age to 57 was the correct decision.
In a post on Twitter, he commented: “Let’s maintain a 10-year gap between the pension-freedom age and the state pension age. The more we delay, the more painful the eventual increase will be.”
Data published by HM Revenue & Customs in January 30 showed that almost £33bn has been withdrawn from pensions since the introduction of pension freedoms in April 2015, which relaxed the ways in which savers can access their pension cash and allowed them unfettered access from the age of 55.