Major pension update as Labour plots huge £1,000 savings shake up | Personal Finance | Finance

Experts have suggested a new Labour pension policy would allow Brits to access their retirement savings at any age. The experts say that these new Labour plans are expected to be unveiled next week in an effort to tackle retirement poverty in Britain and the rising cost of the state pension in the country. Pete Glancy, of Scottish Widows, and Mike Ambery, of Standard Life, detailed these brand new Labour plans to The Telegraph.

He explained that changes would include allowing savers to access a sum of their pension fund at any age, even years before they are due to retire from work. This emergency savings pot would consist of £1,000, the two experts report. As it stands in the UK, pensions can be accessed at 55 years of age, a number that is set to increase to 57 by 2028. A similar change was previously put forward by The Resolution Foundation when it was led by pensions minister Torsten Bell.

“We expect the second half of the pensions review to shortly be announced by the Government, and I think there’ll be a discussion on ‘Should we be helping people build up a rainy day savings pot alongside the retirement pot?’” Glancy said.

“You’d be able to access the savings at any point. The idea is that if the pot gets above £1,000 because you haven’t needed to access it, it’ll tip over into the pension.

“We are supportive of that idea as it will keep many people out of the hands of unscrupulous lenders, and if the money isn’t ever needed for a rainy day, then it means a slightly bigger pension pot at retirement.”

Ambry explained: “The critical item will be the scope of the pensions review and its remit. Given the amount of time and change since the last commission-based review, it would be logical to recognise that the scope of pension and savings in today’s and tomorrow’s world might be wider.”

“As a result, the review could include accessing pensions early through emergency savings,” he added.

The Resolution Foundation last year called for savers to be allowed to borrow up to 20 per cent or £15,000 from their pension savings, which would then have to be paid back at a later date through larger contributions.

Labour listed a review of pensions in its election manifesto with a focus on improving financial security for people who are retired.