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

kuratowski

The way I look at it, I'm still getting access to my personal pension at least 1 year earlier than I was expecting (with SPA = 68).  If it does turn out to be 3 years earlier, even better, but I'll have to wait and see what the scheme and its advisors eventually conclude, as the terms and conditions have defeated me.

Terron

TVAS said:

We are living longer that is a fact the number of older people as a percentage of the population is greater now due to medical advances and old people who have it all at the expense of youngsters. I feel sorry for the kids. The Old Codgers got free university education, cheap house buying, DB pension schemes. In contrast to the kids expensive university education, expensive house buying no DB and at worst a crappy Nest pension. The government do not want people to retire early spend all their pensions and come crying to the state cap in hand for benefits.
I don't even know why this is a thread the minimum pension age is increasing to be within 10 years of the state pension age. Whatever party is in power this will happen!

Your description of the past does not match my experience.

University education may have been free (or rather nearly so) but only about 10% went in the 70s rather than the near 50% that do now.

House buying wasn't cheap. Mortgages were limited to 2.5 times your salary so I needed over 38% in a deposit (luckily the BoMD helped). Also interest rates were over 10%. I got an endowment mortgage to keep the costs down and that didn't exactly turn out well.

Now it was cheap for a few years before the credit crunch due to the causes of that crunch, but I did not buy a property in those years and that was a temporary condition.

In my first job the pension scheme was only open to managers. My second had a DB scheme but the small print said "increases once in payment are entirely at the discretion of the trustees" so have been zero for many years. My sisters and brother in law all have DB pension schemes which are still open (teacher, local government, NHS).

rebuswad

A Fidelity Pensions representative is quoted in link below welcoming the changes, which would indicate they will benefit, so likely they will have PPA of 55 https://www.moneymarketing.co.uk/news/pension-freedoms-age-rise-adds-further-complexity/. As usual with the continued pension tinkering it all needs clarified, but I'm sure a list of providers with PPA will emerge over the next year, and then a scramble to those companies.

The risk is the providers with protected age will increase their charges, if not now then years down the line, and you are tied in if you want earlier access.

hugheskevi

rebuswad said:

The risk is the providers with protected age will increase their charges, if not now then years down the line, and you are tied in if you want earlier access.

I think based on the consultation response, you could transfer a pot from an unprotected provider to a protected provider before April 2023, then transfer it back to the original provider and retain protection.

Future contributions wouldn't be protected, but most people with decent pension pots wouldn't want to access 100% of the pot between 55-57 anyhow.

Alexland

rebuswad said:

The risk is the providers with protected age will increase their charges, if not now then years down the line, and you are tied in if you want earlier access.

Yes it's bad enough that S&S LISAs can't be transferred over 40 as there is no gaining provider willing to take the request and now pensions with minimum access ages might be stuck too.

If the fees get too high it might be possible to partially transfer out the majority of the pension value and just leave the money required for those 2 years with the old provider if they have a percentage rather than fixed charge model. Or maybe open a few small pensions with other providers which will also have protected ages to give options to transfer money/assets between them in future.

This proposal is getting so painful I wonder if they would be better either giving up or trying again. However while the policy is working in favour of people who plan ahead then I guess it's better for it to conclude as at least then we will get some certainty on what might happen. I do wonder if those involved in drafting it are doing everything possible to undermine the policy.

hugheskevi said:

I think based on the consultation response, you could transfer a pot from an unprotected provider to a protected provider before April 2023, then transfer it back to the original provider and retain protection.

I guess that would require it to be (1) allowed and (2) the gaining provider would need to adjust their scheme rules to accommodate people transferring in with protected pension ages?

MoJoeGo

...now all we need is for some kind soul to come up with a list of protected versus unprotected providers. Are there actually all that many 'big' players out there anyway?

As someone that JUST missed the cut for 55, I would prefer to get my ducks in a row on this one and have my money in the right place, even if it means more moves. Need to check what Nutmeg have to say on this...

hugheskevi

Alexland said:

This proposal is getting so painful I wonder if they would be better either giving up or trying again. However while the policy is working in favour of people who plan ahead then I guess it's better for it to conclude as at least then we will get some certainty on what might happen. I do wonder if those involved in drafting it are doing everything possible to undermine the policy.

I don't think there being some fairly easy ways around this is coincidental. Protecting everyone would be fairly pointless, making little difference for decades into the future. Protecting nobody would lead to howls of protest from a relatively small number of well-informed people. Leaving options open for those who are well-informed to circumvent the policy removes those howls of protest.

hugheskevi said:

I think based on the consultation response, you could transfer a pot from an unprotected provider to a protected provider before April 2023, then transfer it back to the original provider and retain protection.

I guess that would require it to be (1) allowed and (2) the gaining provider would need to adjust their scheme rules to accommodate people transferring in with protected pension ages?

The consultation response states at 2.11:

the Government will be publishing draft legislation on the retention and treatment of PPAs to allow members to retain their PPA following block and individual transfers. However, the PPA is not intended to apply to the other rights members accrue in the receiving scheme; the aim is to protect the transferred pension rights, not enhance them. It is envisaged this will require ringfenced PPA transferred rights in the receiving scheme. 

So I think the above confirms it is allowed. Accommodating such transfers will be interesting - I imagine some providers may just insist on completely separate arrangements for protected rights to avoid any complications arising from mixing protected and unprotected rights.

resk

MoneyGeoff said:

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.

Thanks for quoting this - it is the crux of it for me, the actual (well, draft) legislation rather than non-committal speculation from industry "experts".  I agree with your interpretation and I think my bog standard Fidelity SIPP opened three years ago meets all three of these tests, so I think I'm golden to access it at 55.  

Sorted.  I'm away to tell my boss he's a !!!!!!.  

Dale72

If I turn 55 in August 27 but don't access my pension before April 28, would I then have to wait until August 29 before I could touch it?

LHW99

hugheskevi said:

The consultation response states at 2.11:

the Government will be publishing draft legislation on the retention and treatment of PPAs to allow members to retain their PPA following block and individual transfers. However, the PPA is not intended to apply to the other rights members accrue in the receiving scheme; the aim is to protect the transferred pension rights, not enhance them. It is envisaged this will require ringfenced PPA transferred rights in the receiving scheme. 

So I think the above confirms it is allowed. Accommodating such transfers will be interesting - I imagine some providers may just insist on completely separate arrangements for protected rights to avoid any complications arising from mixing protected and unprotected rights.

So we get rid of one kind of "protected rights" only to replace it with a new sort - plus ça change, plus c'est la même chose