pension rule changes

robin61

I have just been reading an article in the daily mail today regarding the new pension rules which confuses me.
It says for people on DC schemes from 2028 the minimum age to access their pension pot will be 57 which seems clear enough but then there is a quote from someone saying that anyone born after 5 March 1961 will find they cannot access their pension until at least age 57.
The two statements seem to contradict each other. My wife was born in 1962 and will therefore be 55 in 2017 and under current rules allowed to take her pension. Will she have to now wait an extra 2 years ?

RichandJ

Journalists + maths = gibberish.

robin61

Yes I think you are right I have just read the treasury report and it reads as if the change won't be implemented until 2028.

nearlyrich

I am retiring at 55 it's too late to change my plans again I was born in 1961...

jayjayegg

hello robin62,
my workmates were on about this article last night, thought it might be a bit of a wind up as were always talking about reaching the magical 55. After checking online today came across it in the mail and i think he has actually quoted the wrong year. If you take it you are born in march 1971, in 2028 that makes you 57. checked loads of articles today relating to this and the changes are definitely 2028.

robin61

Jayjay, yes I have read several things since. Seems that qote in the article was wrong.

robin61

nearlyrich wrote: »

I am retiring at 55 it's too late to change my plans again I was born in 1961...

Same here 1961. The actuarial reduction on my pension is quite a lot but I reckon 57 is do-able for me. 60 is the maximum but I don't think I will be able to set and it that long.

atush

Save outside your DB pension- then you can wait to take it with less reduction?

A DC pension could work well.

robin61

atush wrote: »

Save outside your DB pension- then you can wait to take it with less reduction?

A DC pension could work well.

My strategy is to build up a large AVC which is linked to my DB scheme. I can get 25% of my total pension pot out as a cash free lump sum which basically means my tax free lump sum will be about £180k rather than about £75k (if I worked till 60). If I put too much in the AVC I can take out a small annuity with any residual.

Trouble is with the actuarial reduction is that I lose 5% of me pension pot for every year I take it early. The large tax free lump sum I am building up should help me swallow that.

Well this is the theory I really do have my fingers crossed that a possible left wing future government doesn't scupper my plans by doing something like taxing the lump sum or not letting me claim tax relief at 40%. I read ally do get annoyed at the prospect of someone moving the goal posts.

The other advantage is that my contributions towards the lump sum keep my gross pay under £50k so my wife still gets the child allowance which would have gone by now if I had not ben doing this.