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

Sea_Shell

jamesd said:

Sea_Shell said:
My DH is 55 this year, I'm 55 in 2026.

It was the talk of NEW pensions not being accessable at 55, even if this was before 2028.

If either of us open a new pension, with a new provider, to enable drawdown, can we both still access at 55 if this is before 2028?!

Your DH isn't affected but you might be. He can do what he likes with new pensions because he's already 57 when 6 April 2028 shows up.

In any scheme with a protected age you're also certain not to be affected. You're also certain not to be affected if your 57th birthday is no later than 6 April 2028.

If a scheme isn't protected (new or otherwise excluded) then you can access the pension from your 55th birthday until 5 April 2028, then need to wait until your 57th birthday for any parts you haven't touched. 

So if on my 55th birthday, I take my full TFLS, crystallise my whole pension and commence drawdown, that can continue, regardless of when I opened/started the pension.   Drawdown doesn't have to "pause" between April and my 57th birthday later in the year? 

However, if I'd done nothing with my pension before April 2028, I'd have to wait until my 57th birthday before I could do anything with it. 

Croeso69

Sea_Shell said:

jamesd said:

Sea_Shell said:
My DH is 55 this year, I'm 55 in 2026.

It was the talk of NEW pensions not being accessable at 55, even if this was before 2028.

If either of us open a new pension, with a new provider, to enable drawdown, can we both still access at 55 if this is before 2028?!

Your DH isn't affected but you might be. He can do what he likes with new pensions because he's already 57 when 6 April 2028 shows up.

In any scheme with a protected age you're also certain not to be affected. You're also certain not to be affected if your 57th birthday is no later than 6 April 2028.

If a scheme isn't protected (new or otherwise excluded) then you can access the pension from your 55th birthday until 5 April 2028, then need to wait until your 57th birthday for any parts you haven't touched. 

So if on my 55th birthday, I take my full TFLS, crystallise my whole pension and commence drawdown, that can continue, regardless of when I opened/started the pension.   Drawdown doesn't have to "pause" between April and my 57th birthday later in the year? 

However, if I'd done nothing with my pension before April 2028, I'd have to wait until my 57th birthday before I could do anything with it. 

Para 1 - Correct.

Para 2 - Correct, unless you have a protected retirement age of 55 (or lower).

Cus

My workplace scheme has this in the notes..

If the Government increases the minimum pension age for 

Registered Pension Schemes above the age of 55, then no benefits 

will be payable until you reach the increased minimum pension age.

MoneyGeoff

The protections seem to go further than they did for the increase to age 55 back in 2006. The new document says:

2.5 The government proposes to offer a protection regime for the increase to the NMPA in 2028 for all types of registered pension scheme. This would mean that an individual member of any registered pension scheme (occupational or non-occupational) who has a right under the scheme rules at the date of this consultation to take pension benefits at an age below 57 will be protected from the increase in 2028.

I interpret this to mean that your pension scheme does not have to specifically provide a protected age in its T&Cs The government are saying that if you have a pension before Feb 2011 which you can currently draw at age 55 (ie almost ALL DC pensions and SIPPs) then you are automatically protected and not affected by the increase to age 57. Is that correct?

MoneyGeoff

It seems the above is correct. This article draws the same conclusion: https://www.ftadviser.com/pensions/2021/02/12/minimum-pension-age-set-to-increase-to-57-in-2028/

Under the proposed “protection regime”, people in schemes that are already open — as of the date of the consultation — will be able to access their money from age 55, and this right continues to apply even for money paid in after Thursday. However, those in pension arrangements joined or opened from February 12 will be subject to the NPA increase in 2028. This will be particularly relevant for those in or below their forties, who will only be able to access their pensions before age 57 if they are already a member of a scheme, the consultancy noted.

So people may need to be wary transferring their pension to a new provider. Any existing pension can be accessed at 55 but the transfer may be deemed a new pension and not be accessible until age 57.

tibbles209

I really hope that is the case, that would be excellent news! I am only 30 and so my pension plans have assumed I would not be able to access personal pensions until somewhere between ages 58-60. If I can access my (already opened) pensions at 55 that will be a game changer!

Cus

So basically anyone who has an existing pension of some sort, which is the vast majority of adults, can take it at 55.  So what's the point of this legislation?

Croeso69

Cus said:

So basically anyone who has an existing pension of some sort, which is the vast majority of adults, can take it at 55.  So what's the point of this legislation?

Presumably to increas the age from 55 to 57 whilst peeing off as few people as possible! The I'm all right Jack effect.  

resk

Cus said:

So basically anyone who has an existing pension of some sort, which is the vast majority of adults, can take it at 55.  So what's the point of this legislation?

I guess the point of it is that there will be plenty of pension schemes opened in the future and the access age for them will be 57 from 2028.  If it's sticking at 55 for those schemes already opened, then I too am delighted!  

Croeso69

resk said:

Cus said:

So basically anyone who has an existing pension of some sort, which is the vast majority of adults, can take it at 55.  So what's the point of this legislation?

I guess the point of it is that there will be plenty of pension schemes opened in the future and the access age for them will be 57 from 2028.  If it's sticking at 55 for those schemes already opened, then I too am delighted!  

Quite. There was no such generosity when the age went from 50 to 55 in (I think) 2010. All individual pension contracts were rewritten to age 55 if originally maturing at a younger age, so being treated as if the maturity age was 55 from inception. That legislation was passed by (arguably) a Labour Government, which may or may not make a difference.