Martin Lewis warns ‘do not rush’ as personal pension entry age rises

Personal finance expert Martin Lewis has shared a ‘rough guide’ to upcoming private pension changes, warning savers not to rush withdrawals ahead of the access age going up

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Martin Lewis has revealed a crucial date for anyone with a private pension – while emphasising ‘Please don’t read this as a call to rush money out while you can.’ Speaking on ITV’s This Morning, the personal finance guru was providing a ‘rough guide to the changes.

This relates to the shift in the UK state pension age. The state pension age for both men and women presently sits at 66. This is set to climb to 67 between April 2026 and March 2028.

And this is also affecting the date people can tap into lump sums from their private pensions. Mr Lewis explained: “I was asked today on This Morning… with the age you can normally take money out of a private pension rising from 55 to 57 on 6 April 2028, what happens to people who take money out at 55 or 56 in the year before the age rises?

“The rough general rule is: if by 6 April 2028, you’ve already taken steps to access that bit of your pension eg designated money into drawdown, bought an annuity, those payments should be able to continue after the age rises, even if you’re still only 55 or 56.

“But other uncrystallised pension money you haven’t dealt with by 6 April 2028, will usually need to wait until age 57 to access that part.

“Pls don’t read this as a call to rush money out while you can. Often, leaving money in a pension for longer, so it can keep growing may be the better move. Most important though, there are many other different elements to this and special rules for certain products so before taking pension money for the first time, always get free guidance from MoneyHelper Pension Wise service.”

Martin also disclosed he’d experienced quite a surprise about it: “It dawned on me I’m in this category, as I’ll be 55 in May 2027. I can’t quite get it through my head that I’ll be old enough to take pension money out next year. When the hell did that happen!!! See less”

Martin Lewis has shared his views on accumulating savings and investments for your retirement and later years.

Recently on BBC Morning Live, personal finance specialist Laura Pomfret revealed that savers are acting now ahead of new regulations coming into force. Ms Pomfret explained this was also influencing the ages at which people could access lump sums from their pensions. She highlighted that recent research from the Pensions Commission revealed an interesting trend: “thing that we thought was interesting was it showed that pension pots are being accessed at the earliest opportunity. So almost a third of people are accessing their pension pots at the earliest opportunity. This is again private pensions and perhaps you may be doing it because you’ve got debts you want to pay. You might want to pay off your mortgage. You might want to help family out.

“There’s lots of reasons why people do want to access their pension money early. Now but taking money early can have a knock-on effect if you think if you’re taking a chunk or even a small amount out of the pot less. It’s got less money in it to grow and it may leave you with not enough when you reach retirement because the current state pension age is 66.

“This is going to increase in stages over the next two years to 67 and the earliest age that you can access your private pension is currently 55. It will be rising to 57 from April 28. So, this does cause concern because if you’re accessing your pension early, it could leave you short later. If someone no longer wants to work and access that pension early, they’ve got to work out how to bridge the gap until they reach state pension age.”