Labour has been urged to stop workers accessing their private pensions from the age of 55 in an effort to curb early retirement and tackle rising unemployment, according to a leading think tank.
The Resolution Foundation, which has close links to senior Labour figures, said current pension and tax rules encourage wealthier workers to leave the labour market years before state pension age, worsening labour shortages and weakening the public finances.
Under existing rules, savers can draw on their private pension from age 55, 11 years before the state pension age, which is due to rise from 66 to 67 this year. Up to a quarter of a private pension, capped at £268,275, can be taken tax-free from that point.
In a new intervention, the think tank said ministers should consider limiting access to private pension wealth before state pension age, either by raising the minimum access age or by reducing the amount that can be withdrawn tax-free.
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