Private pension increase from 55 in 2028?

Malthusian

Anonymous101 wrote: »

Was it simply a hard date so for example if you were 50 on 6 April and hadn't began to receive your pension then you woke up the next day and couldn't claim a pension until you were 55?

Yes. If you were 50 on 5 April 2010 however you could transfer your funds to an income drawdown plan (no, George Osborne didn't invent them). You could still take income from your existing drawdown plan even after the age went up to 55 and you became ineligible to open a new one. DB schemes with a retirement age of 50 would have had transitional protection so no problem there.

If your 50th birthday was 6 April 2010 then tough Bristol.

Also worth remembering that if you were retiring in your early 50s due to serious illness which prevented you from working, then the age limit might be irrelevant to you, if your pension scheme rules allowed you to take the funds early on those grounds. (This is distinct from the 12-month terminal illness rule.)

So it should have only affected people in good health who were in their 50s at the relevant time and contemplating retirement halfway through life because they were rich. And if they were in good health yet had enough money in DC funds to contemplate retiring at 50, there really was no excuse not to have money in ISAs / other non-pension pots.

SnowMan

Article on the Telegraph website. It is premium content but if you scroll down quickly enough and freeze or print screen you can see the full text with a bit of effort

https://www.telegraph.co.uk/money/consumer-affairs/might-have-wait-later-age-55-cash-pension/

Interesting quote is

It remains unclear if the pension freedom age will in fact be increased alongside the rise in state pension any time soon, however. When contacted, the Treasury said there had been no update to the plans laid out in 2014

The 2014 plans I take to mean the 'Freedom and Choice in Pensions' document from July 2014

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/332714/pensions_response_online.pdf

(page 6) The Government will increase the minimum age at which people can access their private pension under the new tax rules from 55 to 57 in 2028; the change will apply to all pension schemes aside from those in the public sector that will not link their normal pension age to State Pension age from 2015, namely the Firefighters, Police and Armed Forces


(page 11) The age at which individuals can access their private pension savings will rise under the tax rules from 55 to 57 in 2028


(page 17) The government believes that increasing the minimum pension age meets the guiding principle of fairness and reflects changing expectations of how long people will remain in work and in retirement. The government confirms, therefore, that it will increase the minimum page from 55 to 57 in 2028. It will remain 10 years below State Pension age thereafter

So in the absence of any other information or legislation, that is the best we have to go on at the moment as far as I can see.

Paul_Herring

It remains unclear if the pension freedom age will in fact be increased alongside the rise in state pension any time soon, however. When contacted, the Treasury said there had been no update to the plans laid out in 2014

There's one bit that's unclear to me - which bit does the journalist find unclear about that last sentence?

And I find this bit overly paternalistic:

However, from a policy standpoint, [Baroness Ros Altmann] said 55 is “far too early” to be accessing pension pots because there is a risk of their running out, and people living longer.

Who is she to say it's 'far too early' based upon her presumption that, since some may run out of money, therefore all should be denied.

Her argument doesn't hold water, of course, because the same thing, if it's going to happen, will still happen, only 2 years later. For those who are going to do that, only, of course.

For some reason, our "betters" seem to have this thing about people who are thrifty enough to save throughout their lives are all suddenly going to do a 180° change and become utter spendthrifts once they reach 55 (or 57/58.)

Baroness Altmann said there could even be an argument for the government aligning the freedoms age to 60 to keep in line with the Lifetime ISA age.

I have two words for her. The second one is 'off.'

DesG

Someone should tell HL that they are peddling duff info:-

"Important Information
Once in a pension, you cannot normally access your money until age 55 (57 from 2028), usually up to 25% tax free and the rest taxed as income."



That is the warning that comes up when you select the option to make a contribution.

zagfles

DesG wrote: »

Someone should tell HL that they are peddling duff info:-

"Important Information
Once in a pension, you cannot normally access your money until age 55 (57 from 2028), usually up to 25% tax free and the rest taxed as income."



That is the warning that comes up when you select the option to make a contribution.

How does that differ to what the govt have said will happen?

veryintrigued

I, for.one as someone who will be affected by this change,.do appreciate people's input on keeping this threads topic ticking along.

It's a bit of a conundrum whether being relatively low key, but informed and responsible and therefore planning for this change against kicking off and bringing this change more into the public eye for fear of potentially making this change even more likely it will occur.

veryintrigued

Just bumping this up.

Wonder how things have changed with the last few months.

Paul_Herring

Wonder how things have changed with the last few months.

Nothing's been mentioned that I've seen regarding this.

MoneyGeoff

These are the most recent articles I could find. Nothing particularly informative or useful!

https://www.thisismoney.co.uk/money/pensions/article-8083623/When-age-access-pension-cash-rise-55-57.html

https://www.ftadviser.com/pensions/2020/03/02/industry-urges-against-raising-pension-access-age/

https://www.thesun.co.uk/money/11070198/private-pensions-age-rise-57/

dunstonh

veryintrigued said:

Just bumping this up.

Wonder how things have changed with the last few months.

The Treasury position has been stated that it is going to happen and will be tagged onto a future finance bill.  Nothing has changed.
It is possible the Government will change its mind but nothing has been announced to say it has.