Pension headlines have quite rightly been
dominated with the good news of “accessing pensions from age 55”, “more
flexible annuities to meet lifestyle”, “free guidance for all”, “changes to the
55% tax on death benefits” etc., what has seen little comment, however, is that
from 2028, the age that savers can access their pension funds is rising from 55
to 57. In addition, the recent government announcements have confirmed
that from 2028, this age will be linked to being 10 years below the state pension
age. If the coalition’s proposals from 2013 to accelerate the state
pension age are accepted, younger savers starting their careers today
might not be able to access their state pension until age 70 and therefore
their personal arrangements until age 60.
Whilst it is very clear that The State cannot
afford to pay pensions for an ageing population under the current rules, this
linking of personal pension to state pension seems to be quite a contrast to
the driving force behind the revolution in pensions we are seeing, and might be
a reason for a future generation to tell us the we never had it so good (for
once).
What is clear is that if early retirement is
the goal, savers will need to make effective financial plans to give them the
freedom to stop working when they desire. This could and should include
using other savings vehicles, such as NISAs in addition to their pensions so
that they can bridge the gap between when they want to stop working and when
they can access their pensions albeit in a far more flexible manner than has
been available to them previously.
Duncan
Wilson
Private Client Partner
Telephone: +44 (0)20
7893 3456
Email: getintouch [@]
broadstoneltd.co.uk
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