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

Malthusian

JamTomorrow said:

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? 

No chance. They have to increase charges permanently and across the board, and people who currently benefit from being able to draw their pension up to two years earlier will make up a small and ever-smaller minority of their customers.

BillyHorner

Marnia310 said:

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. 

I’m also in the LGPS. I think there’s zero chance of any protection to be honest.

The government has gone out of its way to say these changes won’t affect uniformed public services (armed forces, police, firefighters, etc.). The implication being it will affect everyone else in the public sector.

If you look at how the move from 50 to 55 was handled, there was a cliff edge in March 2010, where members who hadn’t retired by then were simply told they’d have to wait another 5 years. That included a significant number in their early 50s who were subsequently made redundant with no access to early pension.

hugheskevi

The LGPS regulations say at rule 30:

(5) A member who has not attained normal pension age but who has attained the age of 55 or over, may elect to receive immediate payment of a retirement pension in relation to an employment if that member is not an employee in local government service in that employment, reduced by the amount shown as appropriate in actuarial guidance issued by the Secretary of State.

(6) An active member who has attained the age of 55 or over who reduces working hours or grade of an employment may, with the Scheme employer's consent, elect to receive immediate payment of all or part of the retirement pension to which that member would be entitled in respect of that employment if that member were not an employee in local government service on the date of the reduction in hours or grade, adjusted by the amount shown as appropriate in actuarial guidance issued by the Secretary of State.

Given the reference to age 55, I think that looks a pretty strong contender for deferred members to be protected. Active members didn't have an unfettered right to benefits at age 55 so that is more complicated.

Alexland

OK so Fidelity replied to me and all looks good for my age 55 access with further contributions and transfers-in:

With regards to the change in Finance Act 2022, you will still be able to access your pension at the retirement age of 55 since you opened your account prior to November 2021 and therefore have the protected pension age of 55 even past 2028.

Regarding potentially transferring a pension over us, if you were to add more money or transfers in other schemes into your existing pension account, that can also be accessed at age 55.

However they continued (my use of bold)

When transferring a pension to or from another scheme, some individual transfers may retain a Protected Pension Age (PPA) of 55, and some may not, this is down to the ceding scheme provider.

The "or from" seems to contradict the above reassurance that a transfer in would be accessible at 55? Am I being stupid or do I need to go back to them for further clarification as I still don't feel assured that I can safely occasionally transfer lump sums from my age 57 workplace scheme into Fidelity such that it can all be treated as a single SIPP account and crystallised with TFLS at 55?

Paul_Herring

or do I need to go back to them for further clarification

It appears to be a flat out contradiction. You need to pester them on that specific point.

Dh6

Alexland said:

OK so Fidelity replied to me and all looks good for my age 55 access with further contributions and transfers-in:

With regards to the change in Finance Act 2022, you will still be able to access your pension at the retirement age of 55 since you opened your account prior to November 2021 and therefore have the protected pension age of 55 even past 2028.

Regarding potentially transferring a pension over us, if you were to add more money or transfers in other schemes into your existing pension account, that can also be accessed at age 55.

However they continued (my use of bold)

When transferring a pension to or from another scheme, some individual transfers may retain a Protected Pension Age (PPA) of 55, and some may not, this is down to the ceding scheme provider.

The "or from" seems to contradict the above reassurance that a transfer in would be accessible at 55? Am I being stupid or do I need to go back to them for further clarification as I still don't feel assured that I can safely occasionally transfer lump sums from my age 57 workplace scheme into Fidelity such that it can all be treated as a single SIPP account and crystallised with TFLS at 55?

Sorry to jump in with my own personal question. I’m currently 35 and opened my fidelity SIPP in February 2020 when I was 33. From what fidelity are implying, would my SIPP be accessible at age 55?

Kind regards DH

Alexland

Dh6 said:
Sorry to jump in with my own personal question. I’m currently 35 and opened my fidelity SIPP in February 2020 when I was 33. From what fidelity are implying, would my SIPP be accessible at age 55?

Yes your scheme access age should now be protected at 55 (unless anything further changes) as it was opened before the cutoff date and Fidelity have already publicly confirmed their scheme rules had the required unconditional access from 55 (rather than just referencing whenever allowed under law).
If this is critical to your planning you might like to get it in writing. I was tempted to print the reply and frame it on the wall if it hadn't contained the contradiction on new transfers in which I have now queried. Maybe I need a bigger frame for the whole message trail...

noitsnotme

Haven’t read the whole thread so not sure if Royal London or Transact have been mentioned but I asked my IFA and he’s come back with this today…

A member of a registered pension scheme born after 5 April 1973 only has a right to take their pension benefits from age 55 if they were a member of a scheme before 4 November 2021 with rules that stated a minimum pension of 55 (as opposed to minimum applicable pension age, for example) on 11 February 2021.

Both Transact & Royal London do not state age 55 in their rules and so members affected by the change in 2028 cannot access their benefits until age 57.

😒

Dh6

Thank you Alexland, I will email them and hopefully get it in writing. 

Kind regards DH

cloud_dog

Alexland said:

OK so Fidelity replied to me and all looks good for my age 55 access with further contributions and transfers-in:

With regards to the change in Finance Act 2022, you will still be able to access your pension at the retirement age of 55 since you opened your account prior to November 2021 and therefore have the protected pension age of 55 even past 2028.

Regarding potentially transferring a pension over us, if you were to add more money or transfers in other schemes into your existing pension account, that can also be accessed at age 55.

However they continued (my use of bold)

When transferring a pension to or from another scheme, some individual transfers may retain a Protected Pension Age (PPA) of 55, and some may not, this is down to the ceding scheme provider.

The "or from" seems to contradict the above reassurance that a transfer in would be accessible at 55? Am I being stupid or do I need to go back to them for further clarification as I still don't feel assured that I can safely occasionally transfer lump sums from my age 57 workplace scheme into Fidelity such that it can all be treated as a single SIPP account and crystallised with TFLS at 55?

Isn't the bold section, a coverall from Fidelity's perspective in relation to the ceding scheme (or receiving scheme if transferring out), e.g. they have no control or knowledge over how the ceding scheme rules are defined and therefore cannot confirm if any protections (if they exist) will be retained?

That's how I read it, but I would very much welcome any confirmation you may get back from Fidelity, @Alexland