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

jsinc

granta said:

jsinc said:

Yep wouldn't assume a done deal yet.

https://www.abi.org.uk/news/news-articles/2021/09/stop-more-confusion-for-pension-savers-abi-calls-for-simplicity-when-the-government-increases-pension-access-age/

Interesting article. Key message seems to hang on "things being confusing for everyone" but is there anything else behind the ABI's stance?

I've been informed by Utmost (formerly Equitable Life) that my small pot with them has access at 55 written in 'unless government position changes'. I don't know what means in practice and whether the above will impact it?

I agree with them on confusing and likely distortions. But their members (https://www.abi.org.uk/about-the-abi/abi-members/) earn fees and profits from investments, pensions and annuities etc. If they were also lobbying to address "poor outcomes" via e.g. a higher State Pension then I'd be less cynical, but they're not.

I don't know what the outcome will be. Expect there's a lot of similar lobbying behind the scenes, but that Government even drafted this protection means there must be substantial contrary opinion out there too.

Thrugelmir

granta said:

jsinc said:

Yep wouldn't assume a done deal yet.

https://www.abi.org.uk/news/news-articles/2021/09/stop-more-confusion-for-pension-savers-abi-calls-for-simplicity-when-the-government-increases-pension-access-age/

I've been informed by Utmost (formerly Equitable Life) that my small pot with them has access at 55 written in 'unless government position changes'. I don't know what means in practice and whether the above will impact it?

Being a EL client of the past. Cannot recall the precise ins and outs. Other than my scheme age was moved from 50 to 55.  

RoadToRiches

So if I was born in 1970 this won’t affect me right as I will be 55 in 2025 - 3 years before this comes in in 2028? And in 2028 I will be 58 anyway so over 57.

granta

Thrugelmir said:

granta said:

jsinc said:

Yep wouldn't assume a done deal yet.

https://www.abi.org.uk/news/news-articles/2021/09/stop-more-confusion-for-pension-savers-abi-calls-for-simplicity-when-the-government-increases-pension-access-age/

I've been informed by Utmost (formerly Equitable Life) that my small pot with them has access at 55 written in 'unless government position changes'. I don't know what means in practice and whether the above will impact it?

Being a EL client of the past. Cannot recall the precise ins and outs. Other than my scheme age was moved from 50 to 55.  

Interesting. I was going to transfer out (perhaps to Fidelity SIPP) but they've said I would lose the protection unless the new schemes has a guaranteed age of access of 55. But doesn't look like anything is guaranteed anyway. I'll just carry on paying their higher charges for now!

Cus

So I have just opened a Fidelity SIPP.  I've put the minimum £1k in. 
So if in the near future I transfer from my AJ bell youinvest sipp, any thoughts on whether moving from a '57 age' one to a '55 age' one will be ok or will fidelity turn round to me and say that as the money came from a 'no guarantee so a 57 age' sipp they will not let me take at 55?
So will I need to build up the fidelity sipp by only directly adding using annual allowances? 
Thoughts appreciated, won't hold you to it 😉

RoadToRiches

RoadToRiches said:

So if I was born in 1970 this won’t affect me right as I will be 55 in 2025 - 3 years before this comes in in 2028? And in 2028 I will be 58 anyway so over 57.

Worryingly I have just asked in web chat on pensionwise the same question and they cannot give any guarantee that this date could not be brought forward to catch others out.

And what they did with triple locks does not hold up much confidence that they don't try something like this.

Should I invest in fidelity to be able to transfer in at a later date and guarantee the 55 pension now?

dunstonh

I've been informed by Utmost (formerly Equitable Life) that my small pot with them has access at 55 written in 'unless government position changes'. I don't know what means in practice and whether the above will impact it?

Where the scheme rules refer to the NMPA or its underlying legislation (for example, 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.  

That is how most personal pensions, SIPPs and stakeholder pensions work.   They nearly always DO NOT have an unqualified right under the scheme rules.   A rough guide is that if your pension age increased to 55 when the minimum age went up to 55 then yours will also go up to 57.

There are still some holes in the definition of what an unqualified right means with HMRC planning to give some examples in due course.

Worryingly I have just asked in web chat on pensionwise the same question and they cannot give any guarantee that this date could not be brought forward to catch others out.

Remember the remit of Pensionwise is that it cannot give advice or opinion.   So, it is technically correct that they cannot give a guarantee.   Nor can anyone else for that matter.  Although it would be extremely unlikely to change at this late stage.

Alexland

Cus said:

So if in the near future I transfer from my AJ bell youinvest sipp, any thoughts on whether moving from a '57 age' one to a '55 age' one will be ok or will fidelity turn round to me and say that as the money came from a 'no guarantee so a 57 age' sipp they will not let me take at 55?

From what I can see of the draft legislation you should be fine to transfer from an age 57 scheme (unsure if this is confirmed for AJ Bell yet?) into an existing age 55 scheme that was opened before 6th April 2023. However with nothing being final yet then I have stopped doing any transfers between schemes for now as we already have enough in an age 55 scheme to meet our needs.

RoadToRiches said:

Worryingly I have just asked in web chat on pensionwise the same question and they cannot give any guarantee that this date could not be brought forward to catch others out.

Nothing to worry about Pensionwise know this is not approved yet so can't assure you on aspects of it which may change.

RoadToRiches said:

Should I invest in fidelity to be able to transfer in at a later date and guarantee the 55 pension now?

Not much cost to open a small Fidleity account now (you can start with £20+£5 per month then cancel after a few months all on percentage charges if you stick to traditional funds) although the draft legislation should give you enough time after it's expected to be approved to take any required actions.

dunstonh

From what I can see of the draft legislation you should be fine to transfer from an age 57 scheme (unsure if this is confirmed for AJ Bell yet?) into an existing age 55 scheme that was opened before 6th April 2023. However with nothing being final yet then I have stopped doing any transfers between schemes for now as we already have enough in an age 55 scheme to meet our needs.

Yes, there is a limited window that will allow you to join or transfer benefits into a scheme with an unqualified right to a PPA providing it is done before 5th April 2023.

hugheskevi

Interesting article in Pension Age today, about the Association of British Insurers' (ABI) concern about the change to Minimum Pension age - article available at this link.

The concern is well rehearsed and has been voiced a number of times in recent weeks, and has been supported by AJ Bell. The concern is about the complexity of protection regimes lasting decades, and ABI want the process paused and ideally aligned with 2010 changes to minimum pension age from 50 to 55 so that no additional protections are given out - meaning almost all individuals would have a minimum pension age of 57.

However, of more interest is that the article includes a response from a HM Treasury spokesperson, which is quite definitive:

"We believe it’s right to protect pension savers whose scheme rules provide them with an unqualified legal right to take pension benefits before age 57."

“That is why earlier in the year we set out the details of the framework and have been consulting on the technicalities to ensure it is as simple and fair as possible.”