People face working far longer with a retirement time bomb set to explode in the UK. The Department for Work and Pensions (DWP) state pensioners are dipping into pension pots long before they reach State Pension age, figures show.
Data shows savers under 65 have pulled out £65 billion from their retirement funds since pension freedoms were introduced in 2015. 70 per cent withdrawals are made by people below State Pension age – with almost half going to those under 60.
In total, £36 billion has been taken by under-60s and a further £29 billion by those aged 60 to 64. It means 29 per cent of all withdrawals to people who have actually reached State Pension age.
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Stephen Lowe, of the Just Group, said: “If the regulator had called this an epidemic when it began, perhaps people would have taken it more seriously. We are normalising behaviour that will leave many with inadequate retirement income.”
The Government is preparing to raise the minimum age for pension access from 55 to 57 in April 2028 in an attempt to slow the rush.
Mr Lowe added: “What we are seeing now is the new normal – and for many, it will mean working far longer than they ever expected, or facing a much leaner retirement.”
Mr Lowe said that anyone thinking of taking pension cash early should take steps to understand their options fully and the longer-term consequences of their actions.
Professional advice can help people think about the future while those approaching retirement should take the free, independent and impartial guidance offered by Pension Wise which gives a good overview about financial decisions for later life.
Of the £103 billion taken as flexible payments since 2015, £36bn (35%) was paid to those aged below 60 and nearly £29bn (28%) to those aged between 60-64.