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

resk

I dug this old thread up to note that the Finance Act received Royal Assent in February and so has now become law.  Has anyone heard anything from their pension providers about whether their access age is protected, or seen any further analysis of the provisions of the Act?  I have a small SIPP with Fidelity in addition to a decent sized workplace pension pot, and I'm crossing my fingers for access at 55.  

Here's the Act.  https://www.legislation.gov.uk/ukpga/2022/3/enacted

Paul_Herring

Has anyone heard anything from their pension providers about whether their access age is protected,

Nope, but I've just asked them. Again.

Last time I asked Vanguard, they just prevaricated and refused to give an answer.

JamTomorrow

Just asked my provider (L&G workplace pension scheme) via an online 'chat' and they were quite definitive that mine was 'locked in at 55' for when I could access my pension. 

Still not 100% convinced but as it won't change my plans massively I'm not going to follow it up at this stage.  I would have thought however that for something as significant as this they would have proactively been reaching out to all members of the plan and informing them. 

Alexland

Yup now it's approved providers have been slow at publishing definitive guidance on scheme access ages. From what I can tell my workplace pension portal seems to be saying access age of 57 and I never got a straight answer from them during the consultation on if the scheme rules had the unqualified right of access at 55 so I've asked them again today by email.

While I am pretty sure our Fidelity SIPPs should now have the age 55 protection it would be nice to see them confirm it and publish better guidance on transfers as I might like to move another lump sum across from my workplace scheme as while I didn't want too high a percentage of our wealth on Fidelity from an LTA perspective it would make sense to crystalise it all as soon as possible.

Paul_Herring

Paul_Herring said:

Has anyone heard anything from their pension providers about whether their access age is protected,

Nope, but I've just asked them. Again.

Last time I asked Vanguard, they just prevaricated and refused to give an answer.

My question:

Given that this is no longer draft legislation, and has now been enacted (it received Royal Assent in February):

https://www.legislation.gov.uk/ukpga/2022/3/enacted#p00154

is it now possible for Vanguard to have an "exact stance on the situation [the wording they used for not giving an answer previously]"? More specifically, and exactly, will I be prevented from withdrawing funds from Vanguard from April '28 to May '29 if I started (per legislation, and being able) to withdraw them at age 55 in May '27?

Their form-letter answer:

Dear Paul,

Thank you for your message.

As you are aware, following the Government announcement in 2014, the normal minimum pension age (NMPA), will increase from age 55 to 57 on 6th April 2028.

This means that the vast majority of pension schemes will revert to 57 in 2028, including our Vanguard Personal Pension. [emphasis mine]

There are schemes available that have age 55 baked into their scheme rules and the Treasury announced that the transfer window for NMPA closed on the 3rd November, as opposed to the initial April 2023 date. This means that if you have an unqualified right to access your pension at age 55 within an existing scheme, you still have a protected pension age.

However, with immediate effect, it is no longer possible to acquire this right by transferring into an age 55 scheme.

What this means for you at Vanguard

For anyone who doesn’t have an unqualified right to take benefits below age 57, an NMPA of 55 will apply up to and including 5 April 2028. The NMPA will then change to age 57 from 6 April 2028.

There will be a number of people directly affected by this increase. For example:
- Those born before 7 April 1971 will be 57 by 6 April 2028 so would not be affected by this change irrespective of whether they had taken all, part or none of their benefits by then.
- Those born between 7 April 1971 and 5 April 1973 could be affected if they have not crystalised all their benefits before 6 April 2028.
- For someone born on 5 April 1973, would be 55 on 5 April 2028. If you haven’t crystalised all of your pension on this day and you still have benefits to take at 6 April 2028, you would need to wait a further 2 years until you reach age 57 on 5 April 2030 before you would be able to do so.

It’s important to note that this could impact you if you choose to take your benefits in stages using the Lump Sum option or who choose to use our phased drip-feed drawdown facility.

Those born on or after 6 April 1973 will have a minimum pension age of 57 so will not be able to take any benefits until you reach that age.

If you have a protected pension age of 55 with another pension scheme and wish to transfer it to Vanguard, the protected pension age will be lost on transfer. In this scenario, Vanguard would require you to seek regulated financial advice if your pension value is above 30k in order to proceed with a transfer.

I hope this clarifies.

So. It appears I get the opportunity to withdraw my Vanguard pension for 11 months in 27/28, unable to withdraw for another 13, then I can start withdrawing again.

Might as well go see what Aviva has to say...

MoneyGeoff

@Paul_Herring It’s the scheme rules on 11 Feb 2021 that matter, not the rules now. You should ask them for a document dated before that date that states what the qualifiers were to access at age 55. If there are no qualifiers or no documentation then you have an unqualified right to access at age 55.

Cus

Fidelity confirmed to me that I can access my SIPP at 55 even though I am subject to the 57 age rule generally.

Alexland

Cus said:

Fidelity confirmed to me that I can access my SIPP at 55 even though I am subject to the 57 age rule generally.

Cool. I have sent them a secure message asking them to confirm the same on my SIPP (which I will then print and file their reply, or maybe frame it and put it on the wall...). I also asked if the protection would be affected by making further contributions or transfering in lump sums from scheme(s) that do not have the protection. If ok I will probably move another lump sum out of my workplace pension next time Fidelity are offering transfer cashback for existing customers.

Marnia310

Has anyone heard whether there’s any protection in regards to LGPS ? I am one of those who will hit 55 a week after the 6th Apr 28. I will have been with that pension since 2003. 

JamTomorrow

Once Pension providers have consluded on whether their scheme offers protection to still be able to access from 55 then do we think we will start to see an increase in cost of those schemes? 

Given the sgnificant disincentive to transfer out until you have hit 57 I would be surprised to see costs creep up in those schemes.