The age you can access work and private pensions will rise to 57 soon - here's how to plan ahead

The minimum age you can start accessing private pensions will rise from 55 to 57 overnight on 6 April 2028.

This means people in their mid to late 40s and early 50s need to start planning ahead if they want to retire early, or intend to use some of their pension savings to clear debts like mortgages or meet other important expenses.

It's especially important to find out the age rules on your work and other personal pensions, because some people will continue to be able to access their funds at 55 depending on what they say.

Want to retire early? People in their mid to late 40s and early 50s need to be aware of the change in age rules coming in 2028

But you could accidentally forfeit this right if you move a pension to a scheme without this benefit. And there are other peculiarities to the new age rule which are explained below.

Finance experts also give tips on how savers should get prepared over the next four years, and the options to plug the savings gap for those determined on early retirement.

How will the age change from 55 to 57 work?

Many forty-somethings are likely to have no idea the Government plans to increase the minimum pension age for accessing workplace and personal retirement savings from 55 in 2028. Here's what you need to know...

- The 'normal minimum pension age' (NMPA) will rise to 57 on 6 April 2028. The change is happening to keep it timed at 10 years before state pension age, which will rise from 66 to 67 between April 2026 and April 2028.

- Some people with a 'protected' age written into their pension scheme's rules, perhaps simply one that specifies '55' rather than just referring in general terms to the 'normal minimum pension age', will still be able to access their funds earlier.

There are also pension age exceptions for people in certain work schemes, such as the uniformed public services, and for people who are terminally ill.

- Under the Government's initial plans, people affected by the change who transferred to a scheme with a 'protected' pension age of 55 by April 2023 could gain access to their money at the old lower age.

However, this loophole was closed after pension experts warned it would cause confusion and run the risk of fraudsters exploiting savers.

The option of moving a pension to still benefit from an age 55 threshold was therefore shut down overnight in November 2021 (unless you were already right in the midst of a transfer).

This means you only get to keep the age 55 advantage if you were already a member of a scheme that allowed it before 4 November 2021, and if this rule was already written into the scheme's rules before 11 February 2021.

- Anyone who wants to move their pensions should check the schemes' rules before doing so, in case you switch from one which still allows withdrawals from age 55 to one which will bar this from April 2028, and you want to retain this advantage.

- In some cases, after a transfer a new scheme will allow you to keep the old age 55 option on the funds you have moved, but your future contributions will be subject to the age 57 rule.

So, if you are in a scheme with a protected pension age and then later transfer, you could end up in your new scheme with two different minimum pension ages on separate segments of your savings.

- There is another age quirk that was highlighted by former Pensions Minister Steve Webb when replying to a reader in a recent column for This is Money.

Webb explained the 'very odd' pension rules for people born in a two-year window between 6 April 1971 and 5 April 1973.

They will be allowed to access their pension at age 55 for a period, but then be denied access again from 6 April 2028 until they turn 57.

'Suppose, for example, that you were born on 5 April 1973. In this case you will reach age 55 on 5 April 2028 and can therefore immediately access your pensions on your 55th birthday,' writes Webb.

'However, if you miss that day (perhaps because you are busy celebrating your birthday) you will wake up the next morning to find that you now cannot touch your pensions for another two years.'

What should you do to plan ahead for pension age change?

Rachel Vahey, AJ Bell head of public policy, suggests taking the following action.

Find out your scheme's pension age rules

The first step is to check with your pension scheme. Some workplace and personal pensions will give a protected age of 55, allowing you to take money earlier even when the normal minimum pension age increases to 57.

Rachel Vahey: Remember, 55 is an early age to start drawing on savings

It’s a complicated area, however, so it’s best to check with the pension scheme itself.

Check rules before you move any pensions

If you do have a protected age of 55, then be careful if you want to transfer your pension pot somewhere else.

Some pension providers will continue to protect it, but they don’t have to, so transferring to one that doesn’t will mean you lose the protection and won’t be able to access your pension until you turn 57.

If this is something that’s really important to you then take great care if you change pension provider.

> Should you combine your pension pots? Read our guide

Review your savings and assets held outside a pension

If your provider doesn’t let you access your pension from age 55 but you need access to savings at that point the you’ll need to build up other savings and investments.

That might mean dipping into other savings such as Isas, for example, which you can draw at any time, usually, penalty free.

Consider whether you need to access pensions early

Remember, 55 is an early age to start drawing on savings. You are looking to your investments to provide you with funds throughout your retirement, and that could last another 30 years or more.

How do you plug the two-year gap?

Carla Morris, wealth director at RBC Brewin Dolphin, offers the following tips.

Check your mortgages or loans

If you have any that need to be repaid using your tax-free lump sum when you are 55, you should start talking to your lenders as soon as possible.

Discuss all the options available to you including the options to extend the term of the mortgage or loan. It is important that you are aware of what repayments may need to be made.

Make other arrangements to cover university or school fees

People who are turning 55 when their children go to university may well have been thinking about using their tax-free cash to pay fees, or even to help pay school fees.

Carla Morris: If your provider has set a retirement age of 55, they may start changing the pension fund from higher to lower risk - known as lifestyling - too early

If you are in this position, do make sure you make additional savings contributions to cover the costs. The earlier you start saving the better and using tax efficient investments such as Isas will ensure returns aren't taxed.

Review your pensions

Some pension providers offer lifestyle funds which move the pension from higher to lower risk over the years, especially as you move towards retirement age.

If the provider has set a retirement age of 55, they may start changing the composition of the pension fund too early and you could lose out on some investment gains.

> How to stop your pension being 'lifestyled'

Consider whether to open or boost Isas

Although Isas don’t benefit from tax relief on contributions, income and growth is free of tax.

Isas are also very flexible when it comes to withdrawals, so they could be accessed from age 55 if the pension isn’t available, or even earlier if required - except for the Lifetime Isa which is accessed from age 60.

Also, with the income and growth being tax free, they can be a great way to top up income when you are getting close to crossing over into a higher tax band.