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.

No

Not really seeing what the problem is here. The way it’s going, we will all be too old to enjoy retirement as they’ll have us working till our 80s lol I’m going early and I can’t bloody wait!

100% agree and I will do the same if I am financially able to do so.

I am lucky and can get my old pension at 60 and feel very sorry for the nurses who come after who can't access their until 67.

very envious of you.

I missed out by doing a degree and being at uni . Had I have trained the usual route and done a degree at a later time I would be in your position too.

Nursing has changed so much since I started - not that this post is about that. But I agree with the fact that after 30+ years I am done. Physically and mentally

The reason pension age has gone up is because there are fewer children being born to fund the older generation into retirement!

Those who retire young don't do it and go on benefits - they take their pension. And retiring young allows the younger generation more career growth, surely - I remember people complaining as I grew my career that there was no where to go until xyz retires....

Raising the age to 57yo is nonsensical to me. I have no idea what Rachel Reeves is thinking, though obvs I know she's trying to fill the gap in our economy, what I mean is, I don't get why pensioners and pension rights have had all the stick when they still havent addressed the 1%...

What she’s trying to do is keep people in employment a little longer to boost the economy and NI contributions. People don’t understand that the NI they pay today merely funds the state pension of those that have retired. It isn’t being paid into a pot for their retirement.

I can access mine at 50 (though I have no plans to!)

Some people work very hard through education choices and early to mid careers. Those higher incomes all contribute to society through taxes and NI.

Some people choose to save and not spend on lavish lifestyles or choose to save more specifically because they want to retire early or have a better than average income in retirement.

Some people have ill health or other caring commitments. Focussing on these has intrinsic benefits to society.

Free society, free choices. We are not a communist state.

the biggest issue now with non productive adults are largely ill health - because of Covid, nhs restrictions to treatment or dx- or because women funnily enough pick up most of the caring responsibilities at the childhood and elderly of the lifecycle ie kids and parents.

Maybe because @movemamamove not everyone works in a nice comfortable office. Plenty of people do hard physical jobs and need to stop doing them earlier.

But keeping people in employment makes no difference at all, as it just prevents someone else taking the job. She’s working on the basis that employers will employ more people, on top of those already employed, to drive growth. Which shows how limited a grasp she has of how businesses operate. Hence her budget has been catastrophic for growth, potentially terminal for some care and hospitality businesses, bad for business in general, bad for homeowners, bad for graduates and bad for the low paid.

Those (like me) taking early retirement aren’t generally ones employed in areas with a skills shortage per se, as we tend to be at the peak of our careers, or at least have gone as far as we want to go. All we do by not retiring is prevent progression for others. When I left work my job was fillled by someone else, creating opportunities for promotion in a cascade effect. All of those people are still employed, still spending money and still generating NI. There is the same number of jobs. But now I am paying some tax and continuing to spend outside of the employed sphere. Albeit, because of the anti approach to anyone not employed by the state, an I creaky amount of my time and money is spent outside the U.K.

Interesting thread.

I worked full time, planned my pension draw down at 55. Took most of the money and that same year worked on a business. The tax I paid on the pension money over the tax free 25% was equivalent to my being employed. I now have a successful business, debt free and the rest of the money invested. Do what is right for you. One day there may be bad news and you don't get to retire.

Accessing a pension early doesn't mean someone is actively choosing to retire.

Regrettably workplace age discrimination is real and people tend to get unwell as they get older. I'm in my early 40s, I find it really reassuring that I can access my pension 10 years before state retirement age as it'll help me. Plenty of people in their 50s onwards still have mortgages to pay and kids to fund, if they cant access THEIR pensions the state will need to pick them up and provide benefits/housing etc until they can finally access it.

People I know who have started drawing on their pension early have often been made redundant in their 50s. It can be hard to find another similar job at that age, so having access to private pensions can be extremely helpful, even if it is just top up the difference between what they were earning before and a lower paid job.

I should say though, it is silly to criticize the OP for doing something within the current rules while saying the current rules should be changed. It's perfectly consistent to think it would be better all round if the rules were changed for everyone, while still choosing to take advantage of them as they are. Just as it is perfectly consistent for me to think it would be better if some taxes were higher, without volunteering to make extra payments to HMRC myself. She was just using herself as an illustration of how people's behaviour would change if the rules changed.

A lot of people take their lump sums to pay off their mortgages .

But if you’ve spent it, the tax payer will pay for your care home…

Kiwirose I trained in the traditional way, we were almost the last group in 1990, and then did a non nursing degree, but I worked on the bank alongside studying and paid into the pension. Then (foolishly maybe) went back into nursing ft. Special Class status is like a golden ticket these days. Lots of nurses my age are in the same boat planning the same. It's a timebomb.

Well I don’t argue with the logic of the first half of your post (good on you) but when there are secondary school teacher vacancies everywhere I can’t see the validity in the second part of your post!

Try finding a decent job in your 60s if your company let's you go. I know so many people with great CVs who simply cannot get jobs in their field. You might think it will be fine to get a low paid job in catering or retail or similar instead or take up dog walking or parcel delivery - in your 60s that isn't doable for many people. Drawing on a pension is sometimes the most reasonable option, especially if the house is worth a fair bit.

Many people are made redundant in their mid 50s and find it difficult to find another job. Being able to take your private pension early makes sense: it is your money you have been saving your whole working life and work have pensioned you off before the government is ready, so why shouldn't you be able to access it?

Whilst I partly agree and would up it to 59 - where do you draw the line as effectively unless you are on a defined benefit scheme it’s basically a tax free savings scheme. Do we say to lottery winners or those who have inherited- sorry mate you can’t have the cash till you are 57 etc?

Also - you can continue to work and take your pension. we have a few people doing this: there's no reason not to in our scheme, no more accruals after 60

Took the money at 55 and ran! Given almost 40 years to the NHS, I’d done my time! Never looked back…

@Sparsely I know someone who took his 25% at 55 and monthly payments too and is still in his job he loves at 70 too ( and very good at it but is office based and not manual) his view was he would rather have it available to help family if needed and stick into ISAS that he can easily call on if he has a big expense

I took mine at 59. A year early after being diagnosed with breast cancer.