Ministers should “not rush” to raise the age of pension access above its current level of 55, Steve Webb, former Pensions Minister and partner at pensions consultant LCP, has warned.

Newspaper reports over the weekend have suggested that new Chancellor Rishi Sunak could raise the Pensions Freedoms access age from 55 to 57 to protect pension savers from the risk of excessive cash withdrawal early in their retirement.

The ABI published a report last week warning that many pension savers were withdrawing too much, too quickly from their pension pots and risking “pension poverty as a result.”

The ABI quoted data suggesting 350,000 people had withdrawn their entire pension pot in 2018/19. It said so far £30bn has been withdrawn early from pensions.

Steve Webb, partner at LCP, said there was no pressing need to raise the access age now.

He pointed out the access age was already due to rise to 57 when the State Pension Age reaches 67 in 2028.

He said: “Ministers should not rush to accelerate that timetable. 

“People need time to plan their finances and a sudden change could cause real problems. There is very little evidence that people are using the new Pension Freedoms to recklessly blow their life savings at 55. 

“In many ways a bigger concern is people wanting to access tax-free cash and putting the rest in a low return cash account.  A more creative approach might be to explore whether individuals should be able to access their tax-free cash at 55 whilst leaving the rest in their pension if they wish to do so.”