Former pensions minister Sir Steve Webb has warned that the age at which savers can access their private pension pots could be increased to 60. The current private pension access age is 55, rising to 57 from April 2028, but Webb, now a partner at LCP, said the Labour government headed by Prime Minister Andy Burnham and Chancellor John Healey had “no fondness” for the pension freedoms introduced in 2015.
Rise to 60 possible under Labour
Speaking about the normal minimum pension age (NMPA), Webb said: “With people living into their late 80s and beyond, it wouldn’t astonish me if the age [at which you can access private pension savings] increased to 60. There really is no fondness for pension freedoms in the Labour Party.”
He added that raising the NMPA to 60 would cause “administrative chaos”, and expressed a preference for keeping the age at 55. “However, I’d rather they leave it at 55 because the transition to 57 is very messy and it achieves nothing but administrative chaos,” he said.
Impact on typical pots
Webb highlighted that the typical pot accessed by people in their late 50s is under £10,000, and spreading that over a 30-year retirement would have a very low impact. “First of all, whether you take your pot at 55, 57 or 60, it’s still not going to be there when you’re 87,” he said. “Secondly, the typical pot accessed by people in their late-50s is under £10,000, and spread over a 30-year retirement, the impact would be very low.”
Treasury response
A Treasury spokesman said: “We do not comment on tax policy speculation. The normal age at which people can access their private pensions will be 57 by April 2028, as set out by the Conservative government in the Finance Act 2021-22. There are no further legislated changes to the normal minimum pension age.”
