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

Alexland

MoneyGeoff said:

So why are people fretting about the T&Cs of different SIPP providers? If the scheme says age 55 and has no specific conditions then the government will protect the age of 55, is that right???

If your scheme rules are that clear it should be fine. Some schemes might say access from age 60 or earlier under the discretion of the trustees or might just reference the government minimum pension age rather than actually saying age 55. The devil is in the detail and some SIPP providers don't seem to have an unqualified right of access at age 55 in their scheme rules. They may even find that what they have told customers about age of access on their website product descriptions and FAQs does not match the exact description in their scheme rules. That's why it's helpful that Fidelity have checked their scheme rules and made a clear public statement.

DoctorStrange

Seems the date to retain the NMPA has been brought forward:

The legislation will now protect members of registered pension schemes who before 4 November 2021 have a right to take their entitlement to benefit under those schemes at or before the existing NMPA.


I guess that makes sense to avoid a scramble to protected schemes ahead of April 2023 but disappointing nonetheless!

DoctorStrange

Further background to the transfer window closing:

The draft clause included a window of time during which people could either join or transfer into a scheme which can offer a protected pension age. The window was designed to ensure that those in the process of transferring a pension could complete their transfer and not unexpectedly lose the right to a protected pension age. Stakeholders have subsequently expressed their concerns about this window running until 5 April 2023 as originally proposed, including possible adverse impacts on the pensions market and on pension savers.

The Government believes it is right to offer a protected pension age to those whose scheme rules give them an unqualified right to take their pension before age 57. The Government also believes it is right that those in the process of transferring their pension do not unexpectedly lose the right to a protected pension age. However, after listening to stakeholder views on the draft clause, the Government has decided to shorten the window. The window closed at 23:59 on 3 November 2021. Those who have already made a substantive request to transfer their pension to a pension scheme with a protected pension age of 55 or 56 will still be able to keep or gain a protected pension age assuming the transfer is completed in accordance with the current regulations. This shorter window will help address the issues raised by stakeholders whilst also being fair for pension savers.

MoneyGeoff

Alexland said:

some SIPP providers don't seem to have an unqualified right of access at age 55 in their scheme rules.

Unqualified just means an absence of qualifiers. If the scheme says "you can access your pension at age 55 if and only if Joe Bloggs agrees" then that's a qualified right and as such is not protected.

If the scheme rules say "You can take your pension at age 50 before 6 April 2010 and at age 55 on or after 6 April 2010" then that's an unqualified right and so will be protected.

If the scheme rules don't mention an age then by law on 11 Feb 2021 you had an unqualified right to access it at age 55.

People seem to be looking for the phrase "you have an unqualified right" or "you have a protected pension age" within the scheme rules and I don't agree it's necessary. If the rules don't contain qualifiers then by definition it's unqualified, and it's the rules on 11 Feb that matter, not the rules now.

I'm sure it will turn out that I'm wrong and most pensions will end up not being protected at age 55, it's just bugging me that it's not what the documents actually say. 

Alexland

MoneyGeoff said:

Unqualified just means an absence of qualifiers.

Yes agreed - the scheme rules did not need to mention the new protection or use the word unqualified.

MoneyGeoff said:

If the scheme rules don't mention an age then by law on 11 Feb 2021 you had an unqualified right to access it at age 55.

It seems unlikely that any scheme rules will make no mention of access age as they need to be clear to younger members that they will not get immediate access so will have to wait until some point in future either a specific age or reference to the legal minimum pension access age whatever that might be in future. It is probably an existing requirement that they have such access age rules be an HMRC approved pension scheme. The trustees are likely to seek external legal advice before determining that members have gained the protection.

random321

Is it only Fidelity that have confirmed this?

My workplace pension is with L&G and in all documentation I have been able to access online it references 55 specifically, but is it the case as mentioned above that the scheme rules could be different?

ranciduk

Quick question please 

when I log into my prudential pension app - it says I can access cash from the age of 55

so is that set in stone? Or is there any possibility at all that it could go up to 57 at some stage?

areader

I'm probably way out of my depth here and will need to wait for someone who is better informed to analyse further but I cannot see where in the Finance Bill 2021 as published today it states that any new contribution or transfer into an age 55 protected scheme on or after 4th November would either need to be ring fenced (with a pension age of 57) or lead to a loss of the already protected age for the entire pension.

The explanatory notes are https://publications.parliament.uk/pa/bills/cbill/58-02/0184/en/210184en.pdf clause 10, pages 22-24. The even more impenetrable underlying draft is at https://bills.parliament.uk/publications/43399/documents/874

Paragraph 23ZB sets out how you can retain a pension age of 55

Paragraph 23ZC deals with transfers out of (not into) pension age protected schemes

Is anyone able to highlight the section that handles future new contributions or transfers into an existing age 55 protected scheme?

Cus

I managed to set up a fidelity sipp last month and transferred a nominal £1000 into it from an AJ bell sipp.  My hope is that I can transfer and/or contribute more into it prior to taking it at age 55.
I too would like to know if that hope is justified.

Alexland

random321 said:

Is it only Fidelity that have confirmed this?

I believe they are the only provider to make a public written statement about their SIPP but it was from someone that works at Fidelity not the scheme trustees. Fidelity run other pension schemes for employers etc which may have different scheme rules.

random321 said:

My workplace pension is with L&G and in all documentation I have been able to access online it references 55 specifically, but is it the case as mentioned above that the scheme rules could be different?

ranciduk said:

when I log into my prudential pension app - it says I can access cash from the age of 55
so is that set in stone? Or is there any possibility at all that it could go up to 57 at some stage?

The exact wording in the scheme rules will determine if protected access age applies - not what's written on the website etc.

areader said:

Is anyone able to highlight the section that handles future new contributions or transfers into an existing age 55 protected scheme?

Cus said:

I managed to set up a fidelity sipp last month and transferred a nominal £1000 into it from an AJ bell sipp.  My hope is that I can transfer and/or contribute more into it prior to taking it at age 55.
I too would like to know if that hope is justified.

Sorry it's not clear to me either. I think the difficulty is because the draft legislation amends existing legislation and appears to be silent/unchanged on new contributions or transfers into a protected age scheme.

I find it hard to believe that new contributions should break the protection otherwise many people who make regular contributions would lose it immediately.

It seems to suggest that if transferring into an unprotected scheme then just that pot would be protected in which case the provider might need to implement software changed to segregate assets or more likely just refuse to take such transfers. If they are thinking that way perhaps they would consider that unprotected assets should be segregated when transferred into a protected age scheme?