Accessing pension pot at 55

Piggyplank

Can anyone confirm what age a female born feb 1971 can access her personnal pension. My understanding is that she would need to be 55 so can access feb. 2026 is this correct?

DairyQueen

Currently 55 for everyone regardless of year of birth. However, it is likely the government will increase the access age for younger age groups in line with increased SP age and/or increased longevity. This has been much discussed in the media. See here.

For planning purposes, if I was your age, I would assume that access to private pensions will be ten years prior to my SP age.

Paul_Herring

For planning purposes, if I was your age, I would assume that access to private pensions will be ten years prior to my SP age.

That's not coming in until 2028, so will hit those born in 1973 (who will be 55 in 2028.)

Presuming it'll be a cliff-edge of course, again; there's threads around here discussing this.

But yes - something to be aware of in case they do try to taper it....

ratechaser

Paul_Herring wrote: »

That's not coming in until 2028, so will hit those born in 1973 (who will be 55 in 2028.)

Presuming it'll be a cliff-edge of course, again; there's threads around here discussing this.

But yes - something to be aware of in case they do try to taper it....

Yep, I'll be royally stuffed I suspect. All for the sake of being a couple of days the wrong side of the tax year

Paul_Herring

Yep, I'll be royally stuffed I suspect.

Only if you don't actually plan for it...

tacpot12

ratechaser wrote: »

Yep, I'll be royally stuffed I suspect. All for the sake of being a couple of days the wrong side of the tax year

You won't be royally-stuffed, you will just miss out on a couple of years of tax relief. Even without the change, if you wanted to retire at 55 you would have to save 80% of what you need to live, so having to save an extra 20% isn't the end of the world. As Paul_Herring suggested, you have time to plan to save this extra 20% so you can retire when you want to.

lisyloo

tacpot12 wrote: »

You won't be royally-stuffed, you will just miss out on a couple of years of tax relief. Even without the change, if you wanted to retire at 55 you would have to save 80% of what you need to live, so having to save an extra 20% isn't the end of the world. As Paul_Herring suggested, you have time to plan to save this extra 20% so you can retire when you want to.

Do you mean 20% of the whole pot by 2026??
Eg £150k over 7 years.
That’s a huge ask isn’t it?
I live on less than that.

ratechaser

Hey, allow me a moment to wallow in my own self pity won't you

It's really not going to change anything if I'm being honest, it's more an annoyance that I could do without. Personally I'd retire tomorrow, just not sure my dear wife would be entirely supportive!

Paul_Herring

Do you mean 20% of the whole pot by 2026??

I think that's meant to say something along the lines "10% of the funding required to cover those two years, in each of the 10 years preceding it," and ended up being "20% of one of the years, over each of the 10 preceding years."

e.g. if you're expecting your pension to supply you with £20K (net) from 55, but now it's going to be 57, you need to collect (outside of the pension) £40K over 10 years to cover those 2 extra years.

Or £4K per year. And £4K is 20% of that £20K. Or something.

===

At least that's sorta how I'd be doing it myself, if I hadn't already thought about it long before 2018, and intended to retire before 55 anyway...

NoMore

lisyloo wrote: »

Do you mean 20% of the whole pot by 2026??
Eg £150k over 7 years.
That’s a huge ask isn’t it?
I live on less than that.

No he means that if you still want to retire at 55 but can't take the pension at 57, you have to save outside of the pension (with no tax relief) to cover those years.

So if you need 10k a year, that would have been 8k in the pension, but instead would still be 10k outside of it.

lisyloo

Ok, you haven’t included employee or employers NI via salary sacrifice, but I get your point, thanks.