Martin Lewis has issued a key warning for anyone with a private pension, urging them not to rush into withdrawing money ahead of upcoming age changes. Appearing on ITV's This Morning, the personal finance expert provided a 'rough guide' to the changes affecting the UK state pension age and private pension access.
State pension age rise
The state pension age for both men and women is currently 66, but it is scheduled to rise to 67 between April 2026 and March 2028. This change also impacts the age at which individuals can access lump sums from their private pensions.
Private pension age increase
Mr Lewis explained that the age at which you can normally take money out of a private pension will rise from 55 to 57 on 6 April 2028. He addressed a common question: what happens to people who take money out at 55 or 56 in the year before the age rises?
He said: 'The rough general rule is: if by 6 April 2028, you've already taken steps to access that bit of your pension — for example, 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.'
Don't rush
Lewis added: 'Please 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.'
The financial expert also revealed a personal shock: '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!!!'
Expert advice on early access
Recently on BBC Morning Live, personal finance expert Laura Pomfret highlighted that savers are taking action now before new regulations take effect. She noted research from the Pensions Commission showing that 'almost a third of people are accessing their pension pots at the earliest opportunity.'
Ms Pomfret explained: 'There's lots of reasons why people do want to access their pension money early. But taking money early can have a knock-on effect. If you're taking a chunk or even a small amount out of the pot, 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 2028. 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.'
Lewis concluded by urging caution and proper planning, emphasising that while the age changes are significant, hasty decisions could harm long-term financial security.
