DWP pension alert as people face ‘working far longer’ | Personal Finance | Finance

Britain is facing a ticking retirement time bomb as millions of workers are plundering their pension pots long before they reach State Pension age.

New figures reveal that savers under 65 have pulled out £65 billion from their retirement funds since pension freedoms were introduced in 2015.

The Department for Work and Pensions (DWP) data shows seven in ten withdrawals are made by people below State Pension age – with almost half going to those under 60.

In total, £36 billion has been taken by under-60s and a further £29 billion by those aged 60 to 64.

This leaves just 29% of all withdrawals to people who have actually reached State Pension age.

Critics warn the early grab for cash could condemn millions to hardship in later life.

Stephen Lowe, of the Just Group, said: “If the regulator had called this an epidemic when it began, perhaps people would have taken it more seriously.

“We are normalising behaviour that will leave many with inadequate retirement income.”

Financial experts warn that raiding pensions early deprives savers of years of compound interest – slashing the amount available when they finally stop working.

The Government is preparing to raise the minimum age for pension access from 55 to 57 in April 2028 in an attempt to slow the rush. But critics say the damage is already being done.

Mr Lowe added: “What we are seeing now is the new normal – and for many, it will mean working far longer than they ever expected, or facing a much leaner retirement.”