Plans to Allow Early Access to Pensions Shelved

Plans to allow people to dip into their pension savings ahead of retirement as part of the Government’s pension reforms have been dropped by the Treasury, for the time being at least.

Announcing the decision earlier this week, Mark Hoban, the Financial Secretary to the Treasury, said that there was limited evidence that allowing people early access would have a positive effect on overall pension contribution levels, or provide significant help to individuals facing financial hardship. 

Responses to the recent public consultation on the reform proposals had found there was no overall consensus in favour of the ‘early access’ plan and  many were concerned it would undermine the basic principle that pension saving was intended to provide an income in retirement.

Mr Hoban explained:

“The Government is committed to encouraging saving and wants to give individuals greater flexibility in saving for retirement. While early access has some merits, there is insufficient evidence to suggest it would act as an incentive to save more into pensions.”

Since April 2010, occupational pensions cannot be drawn before age 55, except in very limited circumstances.

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