Former pensions minister Steve Webb has predicted that the age at which people can access their private or workplace pensions could rise to 58 by the late 2030s. Currently, individuals can access these pensions from age 55, with a scheduled increase to 57 in April 2028.
Predicted Rise to 58
Webb, a partner at LCP and the architect of the Triple Lock, told The i Paper that the private pension access age is likely to rise in tandem with the state pension age. He suggested that in theory, by 2037, or realistically by 2039 when the state pension age reaches 68, the private pension age could increase to 58.
If introduced in 2037, this change would affect people born after 1979. Those born in 1978 would still be able to access their pensions at 57 in 2035, while those born in 1979 would face an access date of 2037.
Further Increases Possible
Webb, who oversaw major pensions reform during the coalition government, said it was “perfectly plausible” for the private pension age to rise even further to 60. He noted, “There is a possibility that the private pension age could move up faster than the state pension age.”
Tom Selby, head of retirement policy at AJ Bell, told the paper that linking the state and private pension ages “has been seen as a sensible step to ensure people don’t access their private pension too early and run out of money.”
Impact on Retirement Income
A previous Pensions Committee report highlighted the financial implications of retiring earlier. It stated, “Retiring at 57 (soon to be the earliest age at which private pensions can be accessed) compared to retiring at 65 could reduce the average saver’s annual workplace pension from nearly £9,000 a year to just over £4,000 a year.”
The report added, “Attention must therefore be paid to increasing employment rates among the over-fifties and enabling people to work for longer, with a particular focus on reducing early, permanent exit from the labour market well before the state pension age.”
Concerns for Savers
Patrick Thomson, head of research analysis and policy at the Standard Life Centre for the Future of Retirement, said: “The real dividing line is whether people have built up enough private pension savings. Those who have may still have flexibility over when they stop work. Those who haven’t could find themselves with little choice but to keep working and this would have knock-on implications, including for many working parents who rely on grandparents for childcare.”
