Briefing Notes

Briefing Note 49 - Would allowing early access to pension saving increase retirement income?

Currently in the UK, people cannot withdraw any money, or access any portion of their pension fund before the age of 50 (rising to 55 from 2010). Some stakeholders have suggested that allowing early access (withdrawing money from a pension fund before a defined age) to pension savings, for example, for first-home purchase or in situations of financial hardship, could further increase the number of people saving into a pension fund and the total amount saved. Some potential savers in the UK have cited a lack of early access to pension saving as a barrier to saving.

This Briefing Note summarises the findings of a report published by the PPI. The original report was sponsored by B&CE Benefit Schemes and Legal & General as an initial, independent assessment of a potential policy of early access to pension saving in the UK. It examines the policy options for early access to pension saving and considers the potential trade-offs between making pension saving more attractive to encourage greater saving levels, but discouraging excessive access which could leave less money available for retirement.