To think you shouldn't be able to access your pension at 55 (soon to be 57)

[movemamamove]

We keep hearing about the ever-increasing number of adults who are not in work or actively looking and the impact this has on the economy, and pension age has been increased to 66 and will be 67, so why is it that people can draw down on their pension at 55 rising to 57 in 2028? Surely this encourages people to retire earlier and step out of the workplace far earlier than they should be & it's probably only the wealthiest anyway which doesn't seem fair.

DH & I have been focusing on 55 as the first stage in our retirement. We planned to take a step back from our careers, draw down on one of our pensions to travl & hopefully live abroad for a few years. If/when we do re-enter the workplace here, it would be part time & likely far less senior roles so earning less & spending less. If I couldn't access this money until 60 or even pensionable age, we'd just carry on working until then as the only way we can fund our intended travels is drawing down from a pension fund - we invested heavily into very good workplace pensions so have minimal savings but excellent pensions.

Anyone else have a view on this or maybe an explanation why this early draw-down option hasn't been increased bar this latest 2 year extension? Or perhaps explain the reason why this is a good idea?
AIBU to think it should be extended?
YABU - leave well alone. If you can afford to take a step back & access your own money, why not?
YANBU -agree and it should be increased to 60+ to stop people retiring so early.

why not look at the reasons why those who are in their 50s are doing this?

i'm in my 40s so not there yet but have a couple of friends in this age bracket.

one is a teacher and counting the seconds - her words! - until she can access her pension. last time i saw her she had the most horrendous bruising on her arm, from a child in her class who'd thrown a chair at her.

the other is in a workplace where the older people who retire or leave are replaced with someone who is early 20s. she's said it's very clear that the management do not want a mix of ages and experience. the younger staff are losing out because they aren't getting the on the job training and mentoring they would have from the older staff. the older staff don't feel welcome so are gradually removing themselves into new jobs or early retirement. it's a shame because she says her younger colleagues have been really good, and have been quick to pick up on the age implications and are not happy about it.

i don't blame either of them for wanting to take their pensions early. would you want to stay in a workplace where things are thrown at you, or where your boss makes it clear they think you're past it?

Good for you .

I think people should have the freedom to operate freedom of choice over this. They are not receiving additional money by retiring early, just choosing to spread it out more.

If you can afford to retire I don't see what the problem is. I retired at 57 and use my drawdown pension to live off. My job went to a younger person, I still pay tax, I don't claim any benefits and I volunteer for a charity as a trustee. I think that's a win for everyone.

No, if you can afford to retire at 55 it means you've been fleeced enough in taxes over the years and you can do whatever you want without feeling guilty for the economy. I intend to retire at 58 and live off savings until I can access my private pension at 60. My money, my choice.

I only realised last week that as I was born 2 days too late so I have to now wait until i'm 57, an extra 2 years to take a lump sum from my pension... gutted isn't the word, I want to semi-retire now. My mum tells me I was born over my due date! thanks mum!

I’d love to retire in 10 years. By the time I am 68 I will likely have dementia is my family history is anything to go by so I will not really have a retirement.

A lot of people who take pensions early carry on working in some capacity.
I would be one of them. I've taken a pension at 59 as the reduction is marginal but it's not enough to live on.

I'm now a full time foster carer buy as such if you don't have a child in place you don't get any fees so my pension is my fall back. I need some savings to tide me over when no child. My lump sum is going mostly going straight back into the local economy in the form of employing local trades to renovate my bathroom (as I write) and some other much needed work.
So not everyone taking pensions early are packing their bags and going travelling.

have just had a text which reminded me about someone else i know. who is almost 50 but not quite. unhappy in his current job and wants to change to a similar job but for a different firm.

loads of applications and no luck. was advised by recruiter to trim back his cv so that his career experience was shorter as apparently too many years is an age giveaway - doing that got him interviews. however he gets to interviews and same feedback every time; great candidate but someone else was a better fit.

it's a fairly easy sector to follow on linkedin. when you look 6 or so months later, the role that he's applied for is being done by someone who is much younger. less experienced but also cheaper. no doubt the feedback that someone else was better was true in some cases, but he's now had double digit interviews where this has happened.

Surely this encourages people to retire earlier and step out of the workplace far earlier than they should be & it's probably only the wealthiest anyway which doesn't seem fair.

It's not fair for anyone to be wealthier than anyone else if it comes to that but they are, so why do you think people who can afford it should not be allowed to retire? Should people who can afford big houses be allowed to buy them?

What age SHOULD someone be in the workplace? Why is it anyone else's business?

YABVU. If people are well off enough to retire early they will be paying tax and also putting money into the economy. Plus they are freeing up roles for younger people.

So unreasonable. If they can afford to retire before state pension age then good on them. Both my parents retired before. Mum was in her 50s.

I just hope I am able to

I am in my 60s and work as a contractor in an industry where there are few people my age. If I choose to take my final salary pension, it frees up a role for someone younger. I won't be claiming benefits and I'm certainly not interested in doing a minimum wage 'shortage' job that I am patently unsuited for when my usual hourly rate (for work I actually enjoy) is north of £80. And , if I choose not to renew my contract, the person replacing me won't be on substantially less £ as I'm simply paid the going rate for my skillset in the industry I choose to work in.

I'd worked all my life as a gardener. It was heavy hard work and at 55 I'd had enough. Never had kids and had lived a frugal life so had been saving hard into my pension for 35 years so I took it and am bloody well enjoying it.
It's not just rich people who do this - it's people who have small, quiet, inexpensive lives too.

I now do lots of volunteering (Britain in Bloom, animal and environment charities and the National Trust). Almost all of my volunteering colleagues are the young retired...if they weren't there I don't know how the charities would function.

The government should keep its snout out of private pensions.

My real fear is that private pensions will be robbed to pay the £1.4 trillion under funding of public sector pensions.

I'm not clear on your argument, OP.

You should be allowed to retire at 55, but others being able to do the same financially should have to work?

Love the hypocrisy of your post. You plan to do something but others shouldn't be able to!!

Confused. You are planning on doing something but want to be forced to be not allowed to do it?

If they were still working, then they would be paying tax on earnings, and perhaps spending more. Both would benefit the economy

At the end of the day these are private pensions. You can only get back what you (or you and your employer) paid in plus the return on the investments from the penson fund.

People who have been prudent and sacrificed a chunk of their disposable income for their future are not getting over on those who lack the discipline to plan ahead and did not get a pension.

You do realise that if you retire early you get a reduced pension?

A defined contribution scheme is effectively a personal investment. The age limits to access them can’t be too high as it’s the person’s own money, not a hand out or the company’s money as it often is for dbs / state pensions. By putting more unecessaty restrictions on them people would just end up using ISAs as bridges and stocks and shares ISAs have no age limits.

You pay tax on pension withdrawals too.

You could use the same argument about people who choose to be SAHPs, or choose to work part time, or to freelance, or to do contract work when it pleases them, or to work remotely. They’d be paying more tax and contributing more to the economy if they worked full time and out of the home. People have choices about their working lives and early retirees aren’t an exceptional category of people who could earn more money and pay more tax but don’t.

When i started work, I set up my private pension to allow me to retire at 50. That was 2 years ago. Thanks to the successive governments moving the goal, I absolutely intend to take it as close to 55 as I can. My H is younger than me, he can't take his until 57, so I will probably keep going until then, but I have not yet decided.
I pay more in tax each year than most people earn. I claim zero benefits. I am a net contributor and will remain so as my private pension will still make me a higher rate tax payer. If I work until 67, my private pension will be worth more than I could spend, so yes, I plan to retire and enjoy life. I have worked bloody hard for it.

When you've already paid tax on earnings for about 40 years it gets very, very old. You start to wonder how much more of your increasing precious time you have to give up to benefit an economy you've already funded for half a lifetime.

Early retirees still pay tax on their pensions, council tax, VAT, road tax, fuel tax etc and make up a huge percentage of the people who volunteer so are still actively contributing to society.