Millions of savers will be blocked from transferring their pensions to access them at age 55 after the Treasury closed a loophole.

HM Treasury has clamped down on pension transfers in advance of a planned increase to the minimum age at which savers can access their pension from 55 to 57. From 2028, savers will have to wait an additional two years before they can dip into retirement savings without triggering punitive tax bills. The pensions industry has criticised the plans, warning that some pensions will still be accessible at age 55 while others will be locked until 57. Some schemes explicitly state that savers have an “unqualified right” to take pension benefits at 55 and this will still hold. Originally the Government was to allow savers to free up their pension two years sooner by transferring their retirement pots to a scheme that allowed it. This loophole has since been closed after repeated warnings from experts. One of the problems highlighted by commentators is that millions of savers will now have a mix of pensions, with some pots they can access at age 55, and others where they need to wait to 57 making it harder to plan for retirement. Anyone who made a request to transfer their pension to a pension scheme with a protected pension age of 55 or 56 before Nov 3 will still be able to keep the protection and yesterday’s change will not affect them. John Glen, the economic secretary to the Treasury, said the Treasury purposefully chose not to announce the change at the Budget last week to avoid a wave of pension transfers ahead of the cut off. He said: “Some pension savers could find themselves with poorer outcomes (or even be the victim of a pension scam) if they were rushed by rogue advisers to make a quick transfer in the short time period before the window closed.”

How to calculate your ‘personal inflation rate’

If you read the headlines, you’ve probably seen a lot of people fret that inflation is a big problem for the U.K economy right now. But will it actually end up being a big problem for you? The truth is, it all depends on what you spend your money on. The official measure of inflation, based on economists’ rough guesses about what most people buy each month, could be very different from the unofficial inflation that you yourself are experiencing. This means if you want to know how much to worry about rising prices, and perhaps whether to budget for them, you need to calculate your own personal rate of inflation beyond what you see talked about in news. It’s tempting to think of inflation as a shrinking bank note, as if today’s inflation rate meant each pound coin in your wallet would be worth 95 pence the next time you walk into a store. But the so-called headline rate is really just a one size-fits-all average that can disguise the fact that prices for some goods are ballooning dramatically, while prices for others may be static or even falling. Whether inflation ends up taking a bigger or smaller amount from your budget depends on what your expenses are. A good example right now is energy prices, which are among the biggest catalysts for inflation. If you’re not driving, you’re not directly impacted by higher fuel costs for a car. Of course, a non-driver may still be affected indirectly by higher fuel costs because it could cost more to take public transportation, get an Uber or transport items to stores. But the pain of paying more money to fill up your tank at the petrol station won’t be felt equally by drivers and non-drivers alike. To calculate your personal inflation rate, experts recommend analysing how your annual spending can be divided between eight broad categories — food, housing, apparel, transportation, medical care, recreation and leisure, education and communication, and other goods. With that information, you can then input your spending for each category into a worksheet and update the current inflation rates for each category. This personalised inflation rate will help you to understand how inflation impacts both your spending and your savings. While inflation will eat into any money that you have in a savings account, your investments may not take much of a hit. That’s because stocks historically have outperformed the rate of inflation.

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