Earliest age to claim pension increase to 57 in 2028?

NoMore

Has the increase in pension claim age from 55 to 57 been confirmed by the government. I can only find it was annouced in 2014, but not included when the reforms of April 2015 came in to affect.

hugheskevi

Under the Coalition govt back in July 2014, HM Treasury announced in a response to a consultation that minimum pension age would be linked to state pension age minus 10 years. It was stated in the consultation response that the change would be legislated for in the next Parliament (so all the press articles about legislation being dropped were completely incorrect - it was never intended to be in the act), and legislation still has not happened.

The consultation response stated that the change would apply from when the State Pension age reached 67 in 2028. However, the lack of legislation means many details are left unanswered. The key outstanding questions are:

• Does the current government (which being a Conservative majority is a completely different government to that which made the decision to increase minimum pension age) intend to enact the policy change announced in the Coalition consultation response? As well as being a completely different government there are now many different priorities.
• If the change is legislated for, will the shorter time to the change taking effect mean the change is put back to give people adequate notice to change their plans?
• Will the increase be a cliff-edge in 2028, or will the increase be tapered in, eg, starting in 2024, aligning with state pension age in 2026 and then tracking with the state pension age increase to 67 by 2028. In the original consultation is was stated "The transition to this age will need to begin before 2028 and the government will provide further detail on this in its summary of responses to this consultation" However, there was no mention of this in the consultation response.
• Will protection be given, as it was when minimum pension age last increased in 2010, for those with existing pension arrangements at a particular date?

NoMore

hugheskevi wrote: »

• Will the increase be a cliff-edge in 2028, or will the increase be tapered in, eg, starting in 2024, aligning with state pension age in 2026 and then tracking with the state pension age increase to 67 by 2028. In the original consultation is was stated "The transition to this age will need to begin before 2028 and the government will provide further detail on this in its summary of responses to this consultation" However, there was no mention of this in the consultation response.

Thanks for this, the above is what I'm interested in as if it does happen, this will affect me. As I'm:


55 in 2027, so can take pension if so desired.
56 in 2028, Depends on what they decide.
57 in 2029 can take pension, even if they change rules as above.

Silvertabby

I think the answer is: Work on the assumption that this will happen, and if it affects you make other savings provision for the gap between 55/when you want to retire and the date you can access your pensions.

NoMore

More than likely I will at least take the 25% lump sum at 55 and then see what happens

jimi_man

Surely the pension lump sum will be included as part of the pension and so this will be 57 also?

NoMore

I'm 55 in 2027 before the change is supposed to take place, so assuming I can still take it then. Its in 2028 when I'm 56 that problems may arise and hence my original post.


Its a problem unique to people born in 1972. Unless the phase it in gradually over a few years.

Snakey

As a 1972 baby I'm very interested in the cliff-edge vs overnight aspect, but things have gone quiet for a while now.

It's too much to hope that they've forgotten about it or shelved it (it may technically be a new Government, and obviously different individuals are PM and Chancellor, but it's not as if the Opposition got in). The best we can hope for is a delay, if Brexit gets rocky and perhaps even a General Election, ideally to the point where it's realistically too late to start a phasing-in process prior to 2028. (I'd been under the impression that when they changed the age from 50 to 55 there'd been barely a year or two's notice, but somebody corrected me. So perhaps there's some small comfort that they won't pull the rug literally overnight.)

Or perhaps it'll be overtaken by events. If they introduce pension ISAs they may decide to let the old system (which they'll all be signed up to, let's not forget) just fade out quietly with no new contributions allowed, or they might decide to accelerate the proposed State pension age increases to a point where it'd already be too short notice to have mirrored phasing-in of the private pension age ten years beneath.

In the meantime I am planning based on 57. Which is a real shame, since if it ends up being 55 but I don't find out in time to change my plans I'll have lost out on a couple of years of early retirement that I could have had if I'd known.

I wish they would stop messing around with these things! Retirement planning is a long-term strategy and it totally sucks that even just a few years beforehand you still have to "wait and see" what your options might be.

NoMore, I don't think it will affect people who've already started taking benefits. If you get in there at 55 and the next day they change it to 57, it oughtn't to make any difference to you.

NoMore

Snakey wrote: »

NoMore, I don't think it will affect people who've already started taking benefits. If you get in there at 55 and the next day they change it to 57, it oughtn't to make any difference to you.

Thanks but like you I'm planning for retirement and taking it at 55 or 57 can make a big difference.


Original plan was to take it at 55, providing the SIPP had performed well enough to see me thru to 60 when my DB kicks in. If its not quite enough but then I have to wait another 2 years (until I'm 57) it will be annoying instead of being able to maybe take it at 56 when say my SIPP is now in a better position.


Taking the 25% lump sum at 55, whatever the circumstance should at least enable me to avoid this complication (but may add others!)