Savers should be stopped from cashing in their pensions until the age of 60 to prevent them running out of money , MPs have warned . The Commons Work and Pensions Committee warned that rules allowing people to dip into their pensions from the age of 55 could create 'unrealistic expectations ' about the age at which they can afford to stop work . Reforms of pensions , which take effect next month , give savers discretion over their pensions from the age of 55 , rising to 57 in 2028 . Government officials warn that allowing people to start dipping into their pension by the time they reach 55 will create unrealistic impressions about when they can afford to stop working . But the committee recommended that access to retirement funds should only be granted 'five years before the state pension age ' . Under the proposals , men would not be allowed to withdraw their cash until they were 60 , while women would have to wait until they were 57 . Dame Anne Begg , the Labour chairman of the committee , said savers would waste the tax breaks provided by the Government unless they were forced to wait until their 60s . She said : 'Our view is that , given the significant tax relief provided to pensions , increased longevity , and the importance of ensuring people do not underestimate the income needed in retirement , the minimum age at which people can access their pension saving , except on ill health grounds , should rise to five years below the state pension age . ' In the report , MPs warned that the Government needs to establish a powerful new pensions watchdog to ensure people are not ripped off when they come to access their retirement savings . The Ccommittee said moves by the coalition to relax the rules on pensions meant it was more important than ever that proper protections were in place . It was scathing about the pensions industry saying it had a 'poor record ' when it came to acting in the best interests of savers and needed to rebuild the trust with the public . Dame Anne Begg said savers would waste tax breaks provided by the Government unless they were forced to wait until their 60s . As a result of reforms announced by Chancellor George Osborne in his last Budget , from next month savers will no longer be required to buy an annuity - providing a regular annual income - when they cash in their pension pot . The committee said that while the measure had the potential to encourage more retirement saving by making it more attractive , there were also dangers involved . 'There are also significant risks for individuals from the new freedoms , ' it said . 'These include : failing to make provision for the whole period of retirement or making decisions resulting in insufficient income in retirement ; and exposure to fraudulent , mis-sold or detrimental financial products . ' It said that it was 'questionable ' whether Government plans to establish a guidance service , known as Pension Wise , were sufficient to offset the potential risks - particularly given the low level of understanding of pension products which had , in turn , given rise to a lack of trust in the industry . 'This lack of trust has been exacerbated by the pensions industry 's poor record on acting in savers ' best interests when they access their pension pots , particularly in relation to annuities , ' the report said . 'Savers have previously suffered detriment because some providers did not do enough to ensure that they purchased the right annuity product from the right company . This is unacceptable . 'Pension providers need to do more to save consumers from taking poor decisions , by focusing on consumers ' best interests rather than their own . ' The committee expressed concern about the ability of the Financial Conduct Authority to regulate pensions effectively , after it was told by one FCA witness that they can not 'stop fools acting like fools ' . It said that the creation of single regulator specifically for pensions , would ensure that it had a 'clear focus ' on the whole retirement saving process . 'The case for taking this step is even stronger now , given the greater risks to savers from fraud , and detrimental financial products , which accompany the undoubted advantages of the new flexibilities , ' it said . 'Savers would have clarity on who was responsible for providing guidance and redress , and employers and the pensions industry would have a single body to advise and supervise them . ' The committee chair , Dame Anne Begg said : 'Savers need to be properly protected from being ripped off in frauds or scams , or suffering financial loss from making the wrong decision about how to use their pension pots . 'The scale and pace of recent changes in pensions policy have completely changed the retirement saving landscape . It is necessary to draw breath and review the extent of the changes and their implications . '
From next month savers will be given control over benefits from age 18 . Dame Anne Begg pension savers will waste tax breaks if allowed early retirement . ' employers should be forced to wait until five years before state pension age '