Increase to Minimum Pension age from 55 to 57 on 6th April 2028

hugheskevi

elsewhereinscotland said:

I have two pensions, one is deferred (and small) and the second is my main pension and both are with the same company.

I can take both at 50 at the moment, but I don’t think I will be able to once this legislation goes through.

You will still be able to take them at age 50, the consultation document says:

2.9 Those individuals with an existing protected pension age will see no change in respect of their current protections. The protection regime outlined within this document will apply specifically to the increase in NMPA planned for 2028.

Does anyone know when this legislation is scheduled to go through (assuming the consultation doesn’t change it substantially)?

There will be a consultation response in due course, for which no timetable exists. Following that legislation will go through at some point, again, no timetable yet exists.

MDMD

I can see this getting horrendously complex. So far I have

- A Fidelity SIPP (supposedly able to take at 55)
- A Fidelity Workplace pension (as above)
- A possible second or third Workplace pension if I change jobs (57)
- A small deferred Civil Service (Premium) Final Salary pension (60)
- A LISA (60)
- state pension (who knows)
- ISAs (whenever)

I’m less than 20 years into work and I’ve been consolidating pensions as I go (obviously not the CS one and probably won’t do again if it means losing one accessible at 55).

hugheskevi

MDMD said:

- A small deferred Civil Service (Premium) Final Salary pension (60)

This is Minimum Pension age of either 50 if you joined before 6th April 2006 or 55 if after.

MDMD

hugheskevi said:

MDMD said:

- A small deferred Civil Service (Premium) Final Salary pension (60)

This is Minimum Pension age of either 50 if you joined before 6th April 2006 or 55 if after.

True, but the guide says 

You can claim your pension from age 50 if you joined premium before 6 April 2006, or from age 55 if you joined after that date. However,  if you claim your pension before age 60 we will permanently reduce your pension for early payment.

https://www.civilservicepensionscheme.org.uk/members/premium-scheme-guide/

 I joined on 13 Feb 2006 so just scrape into the 50 club...although last time I checked I only had an annual pension of £2750 ish so it will depend on what the actuarial reduction is and what other provision I have at that point.

jamesperrett

There are calculators available online to find the current actuarial reduction applied to the civil service schemes. For Classic the reduction is around 40% but I don't know what it is for Premium. However, if you are planning early retirement it is usually more beneficial to leave the CS pension alone until your normal pension age and take the money in the first few years from other sources.

Alexland

Looks like the government have published an update on this today including draft legislation. Haven't had time to review it yet.

https://www.gov.uk/government/publications/increasing-the-normal-minimum-pension-age-for-pensions-tax

MoneyGeoff

Previous documents said that if you had a pension open before 11 February 2021 you could take it age 55 regardless of the new rules. However, the way I interpret the latest document is that as long as your pension was accessible at 55 on 11 February 2021, you can join it at any time up to 5 April 2023 and still access it at age 55? 

(3) The entitlement condition is met if
(a) on 5 April 2023 the member had an actual or prospective right under the pension scheme to any benefit from an age of less than 57,
(b) the rules of the pension scheme on 11 February 2021 included provision conferring such a right on some or all of the persons who were then members of the pension scheme, and
(c) such a right either was then conferred on the member or would have been had the member been a member of the scheme on that date.

JoeCrystal

Here is the relevant note regarding drawing on before raised minimum pension age

New subparagraph (3) in paragraph 23ZB introduces an entitlement condition for individuals who become members of a scheme after 11 February 2021 and before 5th April 2023. The entitlement is to safeguard an actual or prospective right under the pension scheme to any benefit from an age of less than 57, but not less than age 55, where such a right was conferred within the scheme rules on or before 11 February 2021, and the right was then conferred on the member or would have been had the member been a member of the scheme on 5 April 2023. 

hugheskevi

Key points for me are:

• There is also a consultation response document

• Change of policy to permit members of registered pension schemes who before or on 5 April 2023 have an unqualified right to take their entitlement to benefits under a scheme at or before the existing normal minimum pension age to be protected (ie retain minimum pension age of 55).

• A very important and significant clarification on what constitutes an unqualified right to take pension from age 55:

Where the rules expressly state that benefits can be drawn from 55 (as at 11 February 2021), the Government considers that would amount to an unqualified right.

Conversely, where the rules refer to the NMPA or its underlying legislation (e.g. permitting benefits to be taken from the lowest age consistent with the Finance Act 2004 regime) that would not confer an unqualified right to a PPA;

• Change of policy to permit protected pension age to be retained following an individual transfer.

• Taken together, I expect the above two points to create great interest in the coming months, as individuals seek to identify which schemes have protection and which do not, and then arrange transfers to a protected scheme in advance of 5 April 2023.

• It is acknowledged there may be some transitional issues. For example, an individual who does not have a protected pension age and at 5 April 2028 will have reached age 55 and has started but not completed the process of taking pension savings before the change in normal minimum pension age. The government will provide further advice on the proposed transitional arrangements and provisions in due course. I will be particularly interested in how pensions accessed via UFPLS are treated in this regard during the transition period (which will presumably be between 6 April 2028 and 5 April 2030).  

• Where a member transfers-in a protected pension to an unprotected scheme, it will be necessary for the scheme to ringfence the transferred-in protected pension such that the initial unprotected pension, future contributions and future unprotected transfers are held separate to the transferred-in protected pension. This could be an administration headache for schemes, potentially leading to some schemes refusing some types of transfer.

Alexland

MoneyGeoff said:

However, the way I interpret the latest document is that as long as your pension was accessible at at 55 on 11 February 2021, you can join it at any time up to 5 April 2023 and still access it at age 55?

Yes that's how I read it too. Very good news for those of us who hope to retire early with portfolios weighted towards pensions rather than ISAs. Also there's still time to open SIPPs for children to give them a protected retirement age of 55.