If you’ve been working hard towards an early retirement, even a two-year delay to accessing your pension wealth can feel significant.
From 6 April 2028, the normal minimum pension age is rising from 55 to 57.
This is the earliest age at which you can usually access your private pension without facing unauthorised charges, unless an exception applies.
For many, this change might not affect their retirement plans. If you weren’t planning on accessing your pension before 57, you may not need to make any adjustments.
However, if you had hoped to retire at 55 or 56, the change could create a noticeable gap between when you stop working and when you can draw from your pension.
This doesn’t necessarily mean you need to delay your retirement altogether. With careful planning, you may be able to use other assets or gradually reduce your working hours while still maintaining your long-term financial security.
The normal minimum pension age is rising to 57 in 2028
The normal minimum pension age typically applies to most registered private pensions and may also apply to many workplace and personal pensions.
Under the current rules, you can usually access your pension from age 55. You don’t have to take money at this age, and doing so isn’t always the right decision. Yet, the option is still available.
As mentioned, this minimum age will rise to 57 from 6 April 2028.
This means that if you reach 55 after the rule change, you may need to wait another two years before you can access your pension savings.
Just note that there are some exceptions. You may be able to access your pension earlier if you retire due to ill health.
Moreover, members of certain public service schemes, including firefighters, police officers, and the armed forces, are also protected from the increase.
The exact rules can depend on your pension scheme, so it’s vital to check your own arrangements rather than assuming the same rules apply to every pension you hold.
This is especially important if you have several different pots from various employers.
You may need to bridge an income gap if you planned to retire before 57
If you intended to retire later in life, the increase might have little effect on your plan. However, if an early retirement is important to you, you may need to think carefully about how you would support yourself before you can access your pension.
Your pension may be one of your largest retirement assets, but it might not be your only source of wealth. You may also have:
- Cash savings
- ISAs
- Rental income
- General investment accounts
It is essential to determine whether these resources could provide enough income for the years before your pension becomes available.
You should also consider how using them earlier could affect your long-term financial security.
For instance, drawing too heavily from investments at 55 could support an early retirement, but it may also reduce the amount available later in life.
A financial planner could help you weigh these choices with confidence before you make a decision.
3 ways you could avoid delaying retirement
If the normal minimum pension age increase does affect your plans, it’s important to realise that you still have options.
The right approach will depend on your assets, spending needs, and attitude to risk.
- Use alternative income sources before you access your pension
If you can’t access your pension until 57, other assets could help you bridge the gap. For example, ISAs can be especially useful since you can usually withdraw money from them without incurring Income Tax or Capital Gains Tax (CGT).
You may also be able to use cash savings to support short-term spending, helping you avoid selling investments during a market downturn.
If you hold investments outside an ISA or pension, these could also support your income. However, selling these investments may trigger CGT, so you need to plan carefully.
Remember: you aren’t necessarily trying to simply find money to cover the next two years.
You should ideally create a withdrawal strategy that supports an early retirement without compromising your later-life financial security.
- Consider retiring before the new rules take effect
If you’re already close to retirement, it might be prudent to review whether you can access your pension before 6 April 2028.
For example, if you will be 55 before the change takes effect, you may still be able to take benefits under the current rules, depending on your scheme.
HMRC has also set out rules for some people who will become entitled to pension benefits before 6 April 2028 but will still be under 57 when the new rules begin.
Just note that you should approach this carefully. Retiring earlier than planned could reduce your pension contributions, shorten the time your investments have to grow, and increase the number of years your wealth needs to support you.
Accessing pension savings earlier may also increase the risk of running out of money later in retirement.
As such, it’s important to think carefully about the decision rather than rushing to beat the deadline, or speak to a financial planner.
- Move into retirement gradually
Rather than a “cliff-edge retirement” – where you stop working entirely on a certain date – you may want to consider a “phased retirement”.
This could allow you to reduce your hours, move into a consultancy capacity, or take on a less demanding role while using other sources of income to top up your earnings.
This could make the period before age 57 far easier to manage.
For example, part-time earnings could reduce the amount you need to withdraw from savings or investments before your pension becomes available. It could also give your pension more time to grow.
This approach might be useful if you want more freedom now, but aren’t ready to fully rely on your retirement fund.
Better yet, a phased retirement could help you adjust emotionally to life after full-time work, especially if your career was an important part of your social life.
Get in touch
We could help you review your retirement plan and understand how the normal minimum pension age increase could affect you.
Please get in touch or email us at advice@mlifa.co.uk for more information.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate tax planning.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.