Survey sparks concern over new retirement age

Wednesday 13th January 2010

A new survey has suggested a large number of people planning on retiring this year could be in for a shock due to the fact the minimum age of retirement is set to rise to 55 in April.

Around half of 45 to 49 year-olds and 39 per cent of 50 to 54 year-olds were found to be unaware of the rise, the report from Prudential declares.

Prudential warns that there is still time for those who will be affected by this change to act and urge individuals to speak to financial advisers and pension providers.

Karin Brown, director of annuities at Prudential, said: "People who want to take their pension benefits and any tax-free cash allowance still have nearly three months to decide what they want to do."

The government first announced the change in 2004 which will prevent many people aged between 50 and 55 from getting private or company pension benefits and them claiming the tax-free cash element of their pension fund until they reach the age of 55.

Ms Brown added: "It is worrying that so many are still unaware but there is time to act before rules change."

Prudential also found that more than 3.9 million adults aged 50 to 54 which is equivalent to 230,000 people in the UK said that they were planned to retire or would reach state pension age in 2010.

The change this year will mean those aged 50 to 54 will be without access to pension benefits or tax-free cash and those people who plan to retire after they are 55 will not be affected by these changes.

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