Pension access age changing from 55 to 57?

kidmugsy

Malthusian wrote: »

If you were born on 5th April 1960 you could draw your pension at 50 (although you only had a single day on which you could do it), if you were born on 6th April 1960 you had to wait until 55.

That's so cack-handed that I guess it must have been Gordon Brown's doing. Was it?

Second question: how much notice did he (or whoever) give of the change?

audi321

Sorry to resurrect an old thread, but has anything concrete come out about this? As someone born in 1973 this is going to directly impact me and I need to plan.

When I started working it was 50, then 55, now 57 (or 58). Madness.

dunstonh

When I started working it was 50, then 55, now 57 (or 58). Madness.

However, when you were a child, someone who was 40 had the same life expectancy as someone who is 60 today. So, do you want to retire at 50 and be dead by 70 or retire at 58 and be dead in your 90s?

badmemory

dunstonh wrote: »

However, when you were a child, someone who was 40 had the same life expectancy as someone who is 60 today. So, do you want to retire at 50 and be dead by 70 or retire at 58 and be dead in your 90s?

As I am now 71 I am aiming for the over 100 that the annuity rates seem to think I'll make. Looking for that tongue in cheek smilie - it's never around when you want it!

Malthusian

kidmugsy wrote: »

That's so cack-handed that I guess it must have been Gordon Brown's doing. Was it?

Second question: how much notice did he (or whoever) give of the change?

Belated post-thread-resurrection answer:

It was announced in 2003 so plenty of notice. It made very little difference to most people, because if you had a personal pension and were between 50 and 55 in April 2010, and you didn't want to take your pension now but you didn't want to wait till 55 either, you could take the tax free cash and transfer the rest to income drawdown, then reinvest the tax free cash in your own name.

You then had the tax free cash in your own name and could do with it as you wished, and could start drawing income from the income drawdown pension whenever you wished, under what we now call the "capped drawdown" rules. The jump in the minimum pension age didn't lock you out of existing drawdown plans, it only stopped you from opening new ones.

Not ideal for everyone due to the tax consequences of removing the tax free cash from the pension wrapper, but for most people these really aren't that bad.

People with occupational pensions were even less likely to be affected as most such schemes have a retirement age over 55 anyway. If your scheme gave you the right to retire *edit* at 50 this would be protected if it met certain conditions. And those who need to retire at 50 due to ill health can still do so under the ill-health rules. What stops people taking occupational pensions at 50/55 is generally acturial penalties, not legislation.

So there was very little point in introducing a tapered minimum age as there is with the State Pension Age, which has real financial consequences and where a "cliff edge" would create too much inequity. If your State Pension Age is increased you "lose" the benefits you might have been paid between the old SPA and the new SPA. If your minimum pension access age is increased you lose nothing; the pension is still there and still growing. And if not being able to access it between 50 and 55 would cause genuine hardship, there was almost certainly a way around it, such as the ill health pension rules.

Silvertabby

People with occupational pensions were even less likely to be affected as most such schemes have a retirement age over 55 anyway. If your scheme gave you the right to retire under 50 this would be protected if it met certain conditions. And those who need to retire at 50 due to ill health can still do so under the ill-health rules. What stops people taking occupational pensions at 50/55 is generally acturial penalties, not legislation. Posted by Malthusian

Not quite - all those being made redundant between 50 and 55 were affected. Yes, it was announced in 2003 (and well publicised by the LGPS) - but 'who reads that boring pensions stuff?'

My ears still burn at the memory of 'conversations' I had with people being made redundant who had 'banked' on getting their pensions straight away.

Anonymous101

Silvertabby wrote: »

Not quite - all those being made redundant between 50 and 55 were affected. Yes, it was announced in 2003 (and well publicised by the LGPS) - but 'who reads that boring pensions stuff?'

My ears still burn at the memory of 'conversations' I had with people being made redundant who had 'banked' on getting their pensions straight away.

No consolation to those people but I suppose the lesson to be learnt from that is that one always needs to try and build up savings in multiple pots. Government meddling is highly likely especially where pensions are concerned and although they represent the most tax efficient way of saving for retirement for many, we do need to factor in the risk of change. :money:

davieg11

audi321 wrote: »

Sorry to resurrect an old thread, but has anything concrete come out about this? As someone born in 1973 this is going to directly impact me and I need to plan.

When I started working it was 50, then 55, now 57 (or 58). Madness.

It will almost certainly be 57 in 2028. So you have plenty time to fill an ISA to keep you going from age 55 to 57. State pension age starts to increase to 66 from next year, so I'm sure they will announce it before then and increase access to pensions to 56.

JoeCrystal

davieg11 wrote: »

It will almost certainly be 57 in 2028. So you have plenty time to fill an ISA to keep you going from age 55 to 57. State pension age starts to increase to 66 from next year, so I'm sure they will announce it before then and increase access to pensions to 56.

I personally think that it will go up to 60. It is a nice round number, especially if the state pension age will go to 70 in the future.

kidmugsy

Silvertabby wrote: »

Not quite - all those being made redundant between 50 and 55 were affected.

Maybe those were the sort of people whom dear old Gordon would have viewed as potential "bigots": not really worth considering.