The government has confirmed that the minimum age from which people can access their pension savings is to increase from 55 to 57 in 2028.
The plans to increase the threshold was first discussed in 2014, but the government has now provided confirmation of the change.
Here, Which? explains how the pension freedoms work and what the age hike could mean for you.
In April 2015, new pension freedoms gave savers in DC schemes greater control over what they could do with their money from the age of 55.
Previously, for most people with a DC pension buying an was the only option when it came to converting pension savings into an income. This is no longer the case and people can now use their entire fund as they wish.
So, if you have a £100,000 pension pot, you can still take up to £25,000 (25%) as a tax-free lump sum. You'd also have the following options:
The announcement came after Work and Pensions Committee chairman, Stephen Timms, asked the Treasury what its plans were for increasing the pension freedoms access age.
In response, Economic Secretary to the Treasury, John Glen, said: 'In 2014 the government announced it would increase the minimum pension age to 57 from 2028, reflecting trends in longevity and encouraging individuals to remain in work, while also helping to ensure pension savings provide for later life.
'That announcement set out the timetable for this change well in advance to enable people to make financial plans and will be legislated for in due course.'
The only thing that's changing is the age at which people can access their pots; the rules around unlocking cash will stay the same.
However, it's not yet clear how the government is actually going to implement the changes.
The government says it will legislate for the hike 'in due course', but hasn't yet specified how the change will work, or how it will communicate it to savers.
Industry experts are calling on the government to urgently provide full details of how this change will work so people know if and how they will be affected and can plan ahead accordingly.
Aegon UK pensions director, Steven Cameron, says: 'It may be that the change will happen on a fixed date such as 6 April 2028, the beginning of the tax year.
'If so, anyone who has their 48th birthday before 6 April 2021 will still be able to access their pension from age 55, but anyone even a day younger will have to wait another two years to start taking an income from their pension.
'Rather than 6 April, the government may pick a date later that year, such as in October, when the state pension age becomes 67.'
Cameron adds: 'Another option is to phase in the change, similar to the gradual increase in state pension age.
'This could see the minimum age gradually increase month at a time from age 55 to 57 with people currently in their late 40s eligible to draw pensions from different ages based on their exact date of birth. This avoids a 'cliff-edge', but would be complex to communicate.
'It's also important to understand if someone who reaches age 55 before the cut-off date would keep the right to access their pension earlier than age 57. For example, if the changeover date is 6 April 2028, an individual born 5 April 1973 will reach age 55 just before the cut-off. They could access their pension that day, but if they don't, will they then need to wait till age 57?'
Planning for your retirement is really important to ensure you'll have enough money to last your entire lifetime and live comfortably.
Here are some key things to consider:
Track your expenditureThis will give you a better idea of what you'll be likely to spend in retirement. For example, will you have paid off your mortgage by then? We've put together a that highlights how much you could need in retirement based on three levels of spending - for essentials, a comfortable retirement and a more luxurious lifestyle.
Get financial adviceIf you can afford to, it's wise to go down this route if you have some complex decisions to make. For an overview of your options for using your pension pot you can call the or use - the free and impartial service backed by the government.