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

Retireinten

It's the potential for access to DC schemes to rise to 58 that impacts us. 

We'll be caught up in the SPA transition arrangements from 67 to 68 and I'd rather naively assumed that we'd be able to access our pension savings exactly ten years earlier than our state pensions (the precise date of which is not yet known). 

We're planning on retiring at 55 but the timing between when we shift to using ISAs for our retirement income to pensions is key for our planning. The later my pension access date the less I need in pension savings and the more in ISAs. Obviously I'd rather save into pensions for the tax relief. 

Any thoughts on how any changes may be brought in to move from 57 to 58 please? 

Sea_Shell

As I turn 55 in late 2026, i didn't think I would be impacted by the raise in age.

However, would I be forfeiting my ability to access my pension at 55 if I were to open a new pension to transfer in existing ones, between now and then?

Would transferring into an existing one be OK   e.g. Royal London into Aviva?

Mine are all DC pensions.

ian16527

Sea_Shell said:

As I turn 55 in late 2026, i didn't think I would be impacted by the raise in age.

However, would I be forfeiting my ability to access my pension at 55 if I were to open a new pension to transfer in existing ones, between now and then?

Would transferring into an existing one be OK   e.g. Royal London into Aviva?

Mine are all DC pensions.

I was just thinking this.
If the change comes in, in 2028, then it seems strange that as I am 56 now, and want to consolidate my current DC pension into a new SIPP to reduce the charges, it wouldnt be allowed to take it until 57. Something seems not quite right

westv

ian16527 said:

Sea_Shell said:

As I turn 55 in late 2026, i didn't think I would be impacted by the raise in age.

However, would I be forfeiting my ability to access my pension at 55 if I were to open a new pension to transfer in existing ones, between now and then?

Would transferring into an existing one be OK   e.g. Royal London into Aviva?

Mine are all DC pensions.

I was just thinking this.
If the change comes in, in 2028, then it seems strange that as I am 56 now, and want to consolidate my current DC pension into a new SIPP to reduce the charges, it wouldnt be allowed to take it until 57. Something seems not quite right

But you'd be well past 57 by 2028 though.

hugheskevi

Sea_Shell said:

As I turn 55 in late 2026, i didn't think I would be impacted by the raise in age.

However, would I be forfeiting my ability to access my pension at 55 if I were to open a new pension to transfer in existing ones, between now and then?

Would transferring into an existing one be OK   e.g. Royal London into Aviva?

My reading of the consultation is that if you were to open a new pension, I think you would be able to access it from age 55 until 5 April 2028. You would not be able to access it between 6 April 2028 and the time you reach age 57.

If you had put it all into drawdown prior to 6 April 2028, then that would be fine to continue accessing as it would be crystallised. It will be interesting to see how UFPLS works, and whether if you had started accessing a pension via UFPLS before 6 April 2028 you could continue to access uncrystalled parts of the pension through UFPLS after 6 April 2028 but before age 57.

hugheskevi

Retireinten said:

Any thoughts on how any changes may be brought in to move from 57 to 58 please? 

All speculation, but drawing on what has been said previously, there is a significant possibility that the age at which State Pension moves to 68 will be brought forward. In the last State Pension age review this was announced as an intention, but not legislated for due to unclear trends in longevity increase. At the next State Pension age review in 2023 this will be reconsidered. I suspect longevity trends since the previous review may indicate bringing forward the date is less justified, although COVID will make recent trends very difficult to ascertain. However, public finance issues are likely to make Ministers attracted to bringing forward the increase.

Whenever an increase to State Pension age happens, it is likely to be phased in over a couple of years. At that point, there will be the question of whether to increase Minimum Pension age. I think the options would be:

• Do nothing - maintain an 11 year gap as this is the simplest approach
• Align minimum age strictly with State Pension age, so minimum age tapers with State Pension age
• Increase minimum age by 1 year from either the day State Pension age reaches 68, or the subsequent 6 April if different.
  

All of these have merit. Personally I think either the first or third would be most likely.  A problem going forward will be all the various protections - we will already be in a position of a mix of 50, 55 and age 57 minimum pension ages by individual pension arrangement. Whilst perhaps not a huge concern, it is more complexity and would hinder things like automatic transfers (pot follows member) if a govt. were to want to pursue that.

ian16527

westv said:

ian16527 said:

Sea_Shell said:

As I turn 55 in late 2026, i didn't think I would be impacted by the raise in age.

However, would I be forfeiting my ability to access my pension at 55 if I were to open a new pension to transfer in existing ones, between now and then?

Would transferring into an existing one be OK   e.g. Royal London into Aviva?

Mine are all DC pensions.

I was just thinking this.
If the change comes in, in 2028, then it seems strange that as I am 56 now, and want to consolidate my current DC pension into a new SIPP to reduce the charges, it wouldnt be allowed to take it until 57. Something seems not quite right

But you'd be well past 57 by 2028 though.

True, having a senior moment of confusion 

Retireinten

Thanks Hugheskevi for responding re: the 57 to 58 shift. I appreciate this is all speculation at the moment and I suspect I am overthinking this a bit.


I'm definitely caught in the transition arrangements for SPA moving from 67 to 68 as it stands now, just have to wait and see what 2023 brings. Fingers crossed, private pensions won't move to 58 and if they do there is a period of catch up. Worst case scenario is we'd need an extra years 'retirement income' in ISA savings (funded from taxed earnings) instead of in private pensions (which we could access mostly tax free using personal allowances). 

shilts

Out of interest , how much notice do the government normally give for a change to the age you can start to claim state pension ? I’m 53 this year and intend to retire at 60 and just wondering whether I’d still be likely to be able to claim state pension at 67 , thanks .

Silvertabby

shilts said:

Out of interest , how much notice do the government normally give for a change to the age you can start to claim state pension ? I’m 53 this year and intend to retire at 60 and just wondering whether I’d still be likely to be able to claim state pension at 67 , thanks .

I read somewhere that the intention is to give at least 10 years notice of any future changes to SPA - but don't know if that was ever rubber stamped.