Seven in ten people who withdrew funds from their pensions over\u00a0the last decade were under 65, according to recent findings from the\u00a0Department for Work and Pensions (DWP). The data highlights concerns\u00a0about accessing retirement pots before reaching the State Pension age.<\/p>\n
A<\/span>lmost 43% of all flexible pension\u00a0withdrawals were made by people\u00a0under 60, according to the DWP. An\u00a0additional 28% of withdrawals were\u00a0carried out by individuals aged between 60 and 64.<\/p>\n Since the pension freedom rules came into effect\u00a0in 2015, the findings show a total of \u00a3102.3 billion\u00a0has been withdrawn flexibly from pension pots.\u00a0Of this, \u00a336 billion (35%) was taken by those\u00a0under 60, while another \u00a329 billion (28%) was\u00a0accessed by those aged 60 to 64.<\/p>\n The average amount withdrawn by individuals\u00a0under 60 was \u00a327,600, rising to \u00a334,500 for those\u00a0aged between 60 and 64. Importantly, these\u00a0figures exclude tax-free lump sum withdrawals,\u00a0which could add billions more.<\/p>\n Currently, the UK\u2019s State Pension age is 66\u00a0for both men and women, but it is gradually\u00a0increasing. From 2026 to 2028, it will rise to 67,\u00a0followed by a further increase to 68 between\u00a02044 and 2046. This gradual rise reflects\u00a0the government\u2019s response to increasing life\u00a0expectancy and financial pressures.<\/p>\n Simultaneously, the official minimum pension\u00a0age, which is the earliest age people can access\u00a0their pension, will rise from 55 to 57 in April 2028.\u00a0This adjustment addresses growing concerns about early pension access and its potential longterm\u00a0effects.<\/p>\n Changes to Inheritance Tax (IHT) rules have also\u00a0affected early pension withdrawals. From April\u00a02027, defined contribution pension pots will be\u00a0counted in IHT calculations. This upcoming change\u00a0has led some savers to prioritise spending their\u00a0pension funds rather than leaving an inheritance.<\/p>\n However, withdrawing pension funds early\u00a0carries significant consequences. Savers must\u00a0carefully consider how this might impact their\u00a0future financial security and the sustainability of\u00a0their retirement income.<\/p>\n Navigating decisions about when to access pension\u00a0savings can be complex, as it involves weighing\u00a0various financial, personal and long-term factors.\u00a0Seeking professional advice is essential, as it provides\u00a0a clearer understanding of the available options and\u00a0helps individuals make informed decisions that align\u00a0with their unique goals and circumstances.<\/p>\n For those considering withdrawing\u00a0money from their pension before reaching\u00a0retirement age, it\u2019s crucial to understand the full\u00a0consequences. Accessing pension\u00a0savings early can result in significant outcomes,\u00a0such as potential tax charges, a reduced\u00a0retirement income and an impact on long-term\u00a0financial security.<\/p>\n Taking the time to explore these factors\u00a0with guidance will ensure that decisions\u00a0are made confidently and with a full\u00a0understanding of the potential outcomes.<\/p>\n If you have any questions or\u00a0concerns,\u00a0please contact us.<\/p>\n <\/p>\n <\/p>\n <\/p>\n This article does not constitute tax, legal or financial\u00a0advice and should not be relied upon as such. Tax\u00a0treatment depends on the individual circumstances of\u00a0each client and may be subject to change in the future.<\/p>\n For guidance, seek professional advice. The value of\u00a0your investments can go down as well as up, and you\u00a0may get back less than you invested.\u00a0A pension is a long-term investment not normally\u00a0accessible until age 55 (57 from April 2028 unless the\u00a0plan has a protected pension age). The value of your\u00a0investments (and any income from them) can go down\u00a0as well as up, which would have an impact on the level\u00a0of pension benefits available.<\/p>\n <\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" £102.3 billion withdrawn flexibly from pension pots since 2015 Seven in ten people who withdrew funds from their pensions over the last decade were under 65, according to recent findings from the Department for Work and Pensions (DWP). The data highlights concerns about accessing retirement pots before reaching the State Pension age. Almost 43% of all flexible pension withdrawals were made by people under 60,…<\/p>\nSCALE OF WITHDRAWALS RAISES QUESTIONS<\/h4>\n
CHANGING THE STATE\u00a0PENSION AGE ADDS COMPLEXITY<\/h4>\n
PRESSURES DRIVING EARLY WITHDRAWALS<\/h4>\n
SEEKING THE RIGHT PROFESSIONAL ADVICE<\/h4>\n
Is it time to discuss your\u00a0retirement plans?<\/h5>\n