Early access to pensions ruled out.

20/04/2001

Savers will not be able to access their pensions early, the Government has announced.

The Treasury said it had decided such a move would not encourage people to save more and was unlikely to help poorer workers.

It added that further changes to pensions should be postponed until the extensive reforms currently being considered, including auto-enrolment, are introduced.

Instead, workers will continue to only be allowed access to money they have saved in a pension scheme from the age of 55 at the earliest, except for in cases of serious ill-health and other limited circumstances.

But the Treasury said it would work with employers and the savings industry to help develop new ways of enabling people to save through the workplace, such as through ISAs that are linked to pension funds.

It said it would also look at ways to improve the flexibility for people who had only small pension pots.

Darren Philp, director of policy at the National Association of Pension Funds, said: "Letting people dip into their pensions early would not have increased their retirement income.

"Instead it would have risked greater dependency on the state pension, and left pension providers in a bureaucratic tangle."

Copyright Press Association 2011