It’s no secret that the state pension system is creaking.

An ageing population means fewer workers supporting more retirees. The number of pensioners is projected to rise by 25% by 2050¹.

What’s also common knowledge is that the age at which you can receive the state pension is going up. In an attempt to ease some of the pressure on the public finances in the decades to come, the state pension age has increased to 66 and will rise to 67 by 2028, then to 68 by 2046.

A third of working age adults do not believe the state pension will exist in 30 years². What seems certain is that it will be less generous relative to earnings and face further changes to ensure its long-term sustainability.

Going up

The increase in the state pension age is perhaps less of an issue for savers who have made good provision for their retirement. However, there is a further change coming that many people will have no idea about; one that could have a significant impact for anyone planning to retire early.

From April 2028, the earliest age at which most people can start withdrawing money from their personal and workplace pension will increase from 55 to 57. The government’s plan is to keep the minimum pension age timed at 10 years before the state pension age.

The change was announced over a decade ago but has somewhat gone under the radar. The move was designed to limit the ability of people to drain their savings and then run out of money later. But it could make the dream of early or phased retirement harder to achieve in the years ahead.

Moving goalposts

If people in their late 40s and early 50s want to retire early, they’ll need to plan carefully. It could also impact those intending to use some of their pension savings to clear debts like mortgages or to meet other expenses.

So, what should anyone affected do to plan ahead for this change?

  • Check your scheme’s pension age rules. Some workplace and personal pensions have a protected age of 55, which would allow you to take money earlier even after the minimum age increases to 57. If you are considering transferring your pension pot, be very careful because you may lose this protection. It’s a complex area, so it’s important to get advice.
  • Review your other savings and investments. You might need to dip into alternative sources of income such as ISAs if you cannot access your pension from age 55.
  • Rethink retirement. It may be appropriate to reconsider or reshape your early retirement plans, remembering that whatever funds you have accumulated may have to last 30 years or more.

 

By checking and understanding what these changes might mean to you, you can keep your retirement plans on track.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

¹ Office for National Statistics, June 2019

² Institute for Fiscal Studies, The future of the state pension, December 2023

 

Approved by The Openwork Partnership on 26/05/2026

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