Millions of pension savers in the UK could face a frustrating delay accessing their retirement funds due to a recent rule change by the Department for Work and Pensions (DWP). According to PensionBee, individuals born between 6 April 1971 and 5 April 1973 are the most affected by this shift.
From 6 April 2028, the minimum age for accessing defined contribution pensions will increase from 55 to 57. While those born on or before 5 April 1971 will be able to access their pensions under the current rules before the change, and those born after 5 April 1973 will naturally fall under the new minimum age of 57, the group born between these dates faces a “cliff edge” scenario.
If individuals in this cohort do not access their pensions before the April 2028 deadline, they may be forced to wait nearly two additional years until they reach 57 to withdraw their savings. Maike Currie, VP of Personal Finance at PensionBee, warns this could come as an unwelcome surprise: “Many people simply assume they will be able to access their pension at 55, not realising the rules are changing.”
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The DWP defends the policy, emphasizing its alignment with the government’s agenda to encourage longer working lives. They highlight that the rule change supports increased labour market participation and helps ensure pension savings last into later life.
Despite the potential for a delay, Ms. Currie advises against hasty pension withdrawals, noting that staying invested longer can lead to greater retirement savings through additional contributions and investment growth. However, she stresses the importance of awareness: “There is a very specific cohort – those born between April 1971 and April 1973 – who face a potential cliff edge,” and missing the deadline could lock them out of their savings for up to two more years.