Pension access age changing from 55 to 57?

ianthy

Hi


I am hearing via a few IFA's that it is highly likely that following the election one of the changes to pensions will be the age at which we can access our private pensions and will move from 55 to 57? Grateful if anyone info real info on this.

marlot

My understanding is that it's scheduled for 2028, at the time the state pension age rises to 67.

ianthy

marlot wrote: »

My understanding is that it's scheduled for 2028, at the time the state pension age rises to 67.

Yes that is what I read too but 2 separate IFA's have said strong possibility this will form part of the changes to pensions following this election.


I just did a little research and Philip Hammond has already confirmed that after the election there will be a budget. I know earlier this year it was confirmed that there would only be once a year budget e.g. Autumn Statement. With the General Election I am expecting a budget to follow after May wins. I wonder how long it will take for the (new?) Chancellor to prepare his/her budget to underpin the new conservative mandate? I am due to transfer my DB pension and then draw down my tax free cash lump sum in mid July so don't want to het caught out.

Snakey

There's supposed to be a recommendation coming out later this month for an accelerated increase in State pension age. The idea of moving from 55 to 57 was to have it be ten years before SP access age (in any given year - not ten years from your own SP access age). So if SP age moves, this might move too.

At the moment there is no legislation changing from 55 to 57. It is taken from a consultation a couple of years ago. That's why nobody is sure that it will happen or, if it does, whether there will be a cliff-edge or a gradual transition between the two ages.

I would suggest that it makes sense to plan for 57 unless you're already in your fifties. If you end up being able to get your hands on it before then, that can only be a good thing. Rather than assume the opposite and find yourself with an unexpected extra two years to fund.

AnotherJoe

ianthy wrote: »

Yes that is what I read too but 2 separate IFA's have said strong possibility this will form part of the changes to pensions following this election.


I just did a little research and Philip Hammond has already confirmed that after the election there will be a budget. I know earlier this year it was confirmed that there would only be once a year budget e.g. Autumn Statement. With the General Election I am expecting a budget to follow after May wins. I wonder how long it will take for the (new?) Chancellor to prepare his/her budget to underpin the new conservative mandate? I am due to transfer my DB pension and then draw down my tax free cash lump sum in mid July so don't want to get caught out.

There's no way that it will change that rapidly ! Apart from anything else the pension industry needs time for their systems to accommodate it (its not just as simple as saying "are you aged more than 57" there's all sorts of other issues.

If the age does move, it will be with plenty of notice. 10 years seems to be the "received wisdom" plenty of mumblings about 2028 or thereabouts. It wont be 10 weeks.

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, but 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:

• Will the new government 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, a smooth taper could start in 2024, align with state pension age at age 66 in 2026 and then track with the state pension age increase to 67 by 2028. In the original consultation it 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 (perhaps 2014)? What form will the protection take (eg will it only apply to pensions with certain characteristics, as was the case in 2006).

AlanP_2

State Opening of Parliament is on 19 June so having something enacted and implemented by mid July is not going to happen.

ianthy

Thanks all this is all very helpful to my pension planning and blood pressure at such an important time.

Thrugelmir

AlanP wrote: »

State Opening of Parliament is on 19 June so having something enacted and implemented by mid July is not going to happen.

Summer recess is the 21st July.

BobQ

Aside from what IFAs think and what the anticipated changes that resulted from the coalition's consultation, surely it makes no sense to allow the minimum pension age to stay unchanged when the SPA is rising and most people will be working longer?

Snakey

Why does it make no sense?

If I can afford to retire at 55, what's the rationale behind forcing me to carry on working?