Higher retirement age means pension changes will have little bearing

Wed, 23 Dec 2009

Changes to the age that people can begin to collect their pensions will have little bearing in the real world because of the lack of individuals taking early retirement, it has been suggested.

From April 6th next year, the earliest age that a person can begin to draw a pension will rise from 50 to 55, with the change affecting both personal and company pensions .

This has given those under 55 a little over three months to decide whether to claim any funds from their pensions while they still have the opportunity to do so.

However, Nigel Callaghan, pensions analyst at Hargreaves Lansdown, believes that because so few workers are in the position to retire before 55, the adjustment will only affect a small percentage of cases.

He said: "Most people when they set off on their pension planning journey think that they are going to retire usually between 60 and 65.

"So the fact that the earliest you can retire is increasing from 50 to 55 is not going to be of that much interest to the majority of people because most people sadly are just not in a position to retire at 50."

Mr Callaghan also advised against withdrawing benefits too early as nowadays life expectancy is higher, which means that the money also has to survive a longer timeframe.
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