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&#39Stakeholder doomed if retirement at 50 banned&#39

The Government risks strangling stakeholder at birth if it pushes ahead

with proposals to raise the minimum retirement age from 50 to 55, say

industry experts.

Providers fear that meddling with the age of retirement risks pushing many

younger savers away from pension planning towards alternative forms of

savings such as Isas.

Many of the Government&#39s intended stakeholder audience are already

wrestling over whether to save for retirement or invest for other purposes.

Proposals by the Downing Street performance and innovation unit to

increase the minimum retirement age to 55 are being considered by the

Government.

But providers fear that any further restrictions on taking pension

benefits will lead to people turning their backs on pensions in favour of

more accessible forms of savings, such as Isas and building society

accounts.

Clerical Medical pensions strategy manager Nigel Stammers says: “The

proposals appear to be playing with fire. The public wants to retire early

even though, in reality, few can actually afford to do so.

“If the Government endorses reducing this perceived flexibility, they

could deliver a severe blow to pensions and strangle stakeholder at birth.”

Technical Connection pensions consultant John Page comments: “Where an

individual has only a relatively small amount of disposable income, there

is already a good argument as to whether they should be putting away money

for a rainy day instead of retirement.

“By restricting accessibility, this is only going to increase the

likelihood of people avoiding pensions.”

Wentworth Rose managing director Philip Rose says: “The move is giving a

conflicting message at a time when the Government should be focusing on

introducing stakeholder. It seems a contradiction in terms and it is as if

the right hand doesn&#39t know what the left hand is doing.”

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