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

DT2001

I turned 50 just after April 2010. The administrators of my deferred DB pension advised me the new rules applied. They changed their minds after I asked if it was a pre existing contract as I had been made redundant and the terms advised that the pension could be taken between 50 and 60. As pensions/schemes are so complex I am not sure if this was actually correct but took the pension soon thereafter. 
So be very careful would be my advice if these dates are key to your planning.

jamesd

Sea_Shell said:

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? 

Yes

Sea_Shell said:

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. 

If it has a protected age of 55 you could still take it from 6 April 2028, no need to wait until 57.

Alexland

I was having another think about this consultation and although they mentioned the date it was published as when you would have needed to hold a pension with a right of access at 55 to get the new protected access age it may be that by the time the detail is finalized they use a different date such as the end of the tax year etc.

I decided it was worth a punt at securing the kids a protected access age (even it is 57 next time if they increase to 58 etc) so opened Fidelity Junior SIPPs (no ongoing charges and they already have Fidelity Junior ISAs) and just made a small £20(+£5) token contribution and setup a regular £20(+£5) monthly direct debit. It might be a waste of time but at least it gets some money out of our estate for inheritance tax and isn't going to be any significant waste of their LTA for if they become higher earners.

Annoyingly with Fidelity the minimum you can manually invest is £25 so I will have to wait a few months for the £5 tax relief before the initial deposit can go into a fund although I believe the future regular direct debit £20 and £5 relief should invest automatically twice a month. I might cancel it before it gets to the £1k they would normally require to open the accounts with a lump sum because I can't see anything in the terms that require the DD contribution to continue and doubt they will bother chasing me as they are getting no fees on these accounts anyway.

ratechaser

Alexland said:

I was having another think about this consultation and although they mentioned the date it was published as when you would have needed to hold a pension with a right of access at 55 to get the new protected access age it may be that by the time the detail is finalized they use a different date such as the end of the tax year etc.

I decided it was worth a punt at securing the kids a protected access age (even it is 57 next time if they increase to 58 etc) so opened Fidelity Junior SIPPs (no ongoing charges and they already have Fidelity Junior ISAs) and just made a small £20(+£5) token contribution and setup a regular £20(+£5) monthly direct debit. It might be a waste of time but at least it gets some money out of our estate for inheritance tax and isn't going to be any significant waste of their LTA for if they become higher earners.

Annoyingly with Fidelity the minimum you can manually invest is £25 so I will have to wait a few months for the £5 tax relief before the initial deposit can go into a fund although I believe the future regular direct debit £20 and £5 relief should invest automatically twice a month. I might cancel it before it gets to the £1k they would normally require to open the accounts with a lump sum because I can't see anything in the terms that require the DD contribution to continue and doubt they will bother chasing me as they are getting no fees on these accounts anyway.

I applaud your extreme long term planning re kids, but there are so so many things that could change over the next 40 or so years makes it a very optimistic punt. Of course if you are proved right, do let me know in 40 years 

And obviously, I hope that 'access existing pensions at 55' is the end outcome, it just still seems optimistic to me. Wait and see...

hugheskevi

Alexland said:

I decided it was worth a punt at securing the kids a protected access age (even it is 57 next time if they increase to 58 etc) so opened Fidelity Junior SIPPs (no ongoing charges and they already have Fidelity Junior ISAs) and just made a small £20(+£5) token contribution and setup a regular £20(+£5) monthly direct debit.

I wish I'd done similar prior to 2006, as my employer's DC AVC scheme was one that benefitted from protected minimum pension age of 50.

It was quite an expensive mistake as it has turned out, I could have got quite a bit more higher rate relief that is instead headed into ISAs to partially fund period 50-55.

Alexland

ratechaser said:

I applaud your extreme long term planning re kids, but there are so so many things that could change over the next 40 or so years makes it a very optimistic punt. Of course if you are proved right, do let me know in 40 years

They are both quite small so you might have to wait another decade before I might still be alive to update this thread to confirm their retirement age!

hugheskevi said:
It was quite an expensive mistake as it has turned out, I could have got quite a bit more higher rate relief that is instead headed into ISAs to partially fund period 50-55.

Yes we have similar considerations on how much to put into S&S ISAs to fill the gap (want to retire around 50 now) and if we should still be bothering with LISAs. I guess if it got too tight we could pay the withdrawal penalty on some of the LISA money and probably still be in profit on the bonuses overall.
The other benefit of getting access at 55 would be the reduced chance of being over the now frozen LTA. It would give a clean decade for us to extract my TFLS for our IO mortgage which needs repaying by 65.

resk

Alexland said:

Yes we have similar considerations on how much to put into S&S ISAs to fill the gap (want to retire around 50 now) and if we should still be bothering with LISAs. I guess if it got too tight we could pay the withdrawal penalty on some of the LISA money and probably still be in profit on the bonuses overall.

Same here.  I actually didn't bother putting anything in a LISA this tax year, just used up the full 20k in the S&S ISA with an eye on accessibility, but now it's looking more likely I'll be able to get into my pensions at 55 (positive mental attitude!) I might stick 4k into the LISA next year.  

Alexland

resk said:

Same here.  I actually didn't bother putting anything in a LISA this tax year, just used up the full 20k in the S&S ISA with an eye on accessibility, but now it's looking more likely I'll be able to get into my pensions at 55 (positive mental attitude!) I might stick 4k into the LISA next year.  

We have been doing £4k each into the LISAs since they launched 4 years ago in addition to me sal-sacing nearly the whole annual allowance and my wife sal-sacing enough to get her down to the personal allowance (which is above min wage as she does less hours) so our S&S investments are heavily weighted to later life access.

Next tax year we are going to start with S&S ISA contributions then make a decision in about October on if we are continuing with LISA contributions. It does seem wasteful not claiming those £1k bonuses but being able to retire early is important too. But then £8k pa into LISAs isn't really going to make a lot of difference to when we retire and we might get some inheritance in that time. Maybe it's better to take the risk of paying the early withdrawal penalty on some of it. It would really help to have some certainty on our pension access age. Hmm.

atush

TVAS said:

We are living longer that is a fact 

Actually, for the first time in many decades this may not be a fact.  The ONS has not yet released new UK projections, the the US equivalent has already said the average LE of americans has lowered more than 1 full year, first time in like forever.  It was already dropping a bit due to the opiate crisis, but in the last year the deaths of over 550K have made the drop.

elsewhereinscotland

Hi

I have two pensions, one is deferred (and small) and the second is my main pension and both are with the same company.

I can take both at 50 at the moment, but I don’t think I will be able to once this legislation goes through.

I was planning to retire in November 2022 when I am 52, but now think I might need to go earlier if I want to be able to access my main pension before 55.

Does anyone know when this legislation is scheduled to go through (assuming the consultation doesn’t change it substantially)?