The Government has rejected proposals to allow savers to withdraw their pension early.

Financial Secretary to the Treasury Mark Hoban says it is unlikely early access would encourage people to save for retirement nor would it help those in hardship.

At present you can only begin drawing a private pension at age 55 in most cases.

Campaigners had hoped early access would be granted to help encourage savings given many are worried about having their money tied up for so long.

The Department for Work and Pensions estimates around 7 million people of working age are saving too little for retirement.

Hoban stresses the extensive private reforms already planned, most notably the introduction of automatic enrolment into a pension for all employees from next year, should be implemented before the Government considers further reform.

He says: "The Government is committed to encouraging saving and wants to give individuals greater flexibility in saving for retirement. While early access has some merits, there is insufficient evidence to suggest it would act as an incentive to save more into pensions."

The decision comes after a two-month consultation period during which the Government received over 100 responses.

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