The government cited increases in longevity and changing expectations of how long people remain in work as reasons for raising the normal minimum pension age
People aged 55 can now access their retirement funds but the Treasury wants to raise this age limit by two years from 6 April 2028.
The normal minimum pension age is the minimum age at which most pension savers can access their pensions without incurring an unauthorised payments tax charge, except when they are taking their pension due to ill-health.
The government cited increases in longevity and changing expectations of how long people remain in work and in retirement as reasons for increasing the normal minimum pension age.
Raising the normal minimum pension age to age 57 will help ensure that individuals will have financial security in later life by encouraging individuals to save longer for their retirement.
The rise will maintain a 10-year gap between the point someone can access their private pension and the state pension age.
The rise in minimum pension age will not apply to all as members of the firefighters, police and armed forces public service pension schemes will not be part of it.
Michael Ambery, partner at Hymans Robertson said: Individual pension savers could be put off by changes that on the face of things may just sound like you need to work for longer and money is locked away. In the current environment saving for retirement and what that looks like may mean this may feel unpopular.
A change to the earliest point at which an individual can claim pension benefits and the payment of benefits such as state pension and other pensions becomes a juggling act where an individual will need help and support in order to determine best approach and timing of taking benefits, he said.
Sarah Brough, a professional trustee at Dalriada Trustees, said: There is a possibility that some employees will rush to retire before the step-up kicks in. So, communication with members will be important, ensuring they make informed decisions on taking benefits rather than just a knee-jerk reaction to the change in the law.
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