Age to access pension - simple query

jscol

My wife and I both pay into the NHS pension scheme. Therefore I am much more knowledgeable about DB rather than DC schemes.
We also have a small DC pension for her from Royal London. She is presently 47. We started this DC scheme in early 2019.
I understand that in 2028 the age you can access a DC pot changes from 55 to 57.
However I am unsure what this means?
Does this mean she will still be able to access at 55 because we started before 2028? Or is it a case that this rule comes into place for all pensions in 2028 and she can't access until 57?
Value of pot is presently 20k so small pots rule not relevant. 
Assuming we take TFLS at 55 or 57 (might coincide with children needing stuff) would this have any tax or other implications for her NHS pension?
Thanks for any advice.

Secret2ndAccount

Most schemes created prior to Nov 2021 will be protected from the change. You have to have 'unqualified rights' to take the pension at 55, but that is most modern schemes. You could run into problems for example, if it was an employer's scheme, and she needed their permission to take it. But for a personal pension there is very little likelihood of any stipulations - she will have an unqualified right.
Even money paid in after the age changes can still be withdrawn at 55, as long as the pension was in place, and the age 55 rights established before the change.

hugheskevi

Secret2ndAccount said:

Most schemes created prior to Nov 2021 will be protected from the change. You have to have 'unqualified rights' to take the pension at 55, but that is most modern schemes. You could run into problems for example, if it was an employer's scheme, and she needed their permission to take it. But for a personal pension there is very little likelihood of any stipulations - she will have an unqualified right.

I didn't think protection would be as widespread as this, for example, Abrdn say (my bolding):

Schemes with protected pension ages

Protection is only given if the scheme rules specifically gave an 'unqualified right' to retire at 55. This isn't simply the ability to take benefits from age 55, but rather that the member doesn't need the consent of the trustees, the scheme administrator or employer to take benefits at this age. Consent is likely to be a more common feature in occupational schemes.

However, many SIPPs and personal pensions will have adopted model scheme rules which link the age benefits can be accessed to the 'normal minimum pension age' rather than an actual age such as 55. These schemes will not benefit from protection.Clients in schemes with existing protected pension ages, such as pre A-Day occupation related early retirement ages and those who retained an early pension age in 2010 when the NMPA changed from 50 to 55, will not be affected by this latest increase.

MX5huggy

The only people that can answer this is Royal London themselves. I would expect different RL products have different rules and how those rules relate to government pension rules. 

L9XSS

Regarding the small pots rule, could the existing pension be “split” by the provider RL if requested by the OP into one containing less than 10k? Not fully sure of the rules.....

xylophone

It all hinges on the provisions of the particular scheme/ policy.


https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm062215

Example

https://thepeoplespension.co.uk/minimum-pension-age-change/

jscol

Thanks. That's really useful. 
I had assumed there was a one size fits all approach and the same rules for all DC pensions.
The Royal London website doesn't seem to have an answer that I can see but I'll search again and if not ask the IFA who arranged it.
I think I am right in saying that we can take the 25% TFLS (at 55 or 57) without affecting my wife's NHS pension contributions? In other words she won't trigger the money purchase allowance rules? 

hyubh

jscol said:

I think I am right in saying that we can take the 25% TFLS (at 55 or 57) without affecting my wife's NHS pension contributions? In other words she won't trigger the money purchase allowance rules? 

Unless some of these NHS pension contributions take the form of a DC AVC, taking any lump sum from the RL pension doesn't have any implications on them since it isn't a money purchase scheme.

MX5huggy

Taking the TFLS from a DC pension only does not trigger MPAA. But even if you did trigger MPAA it does not effect what you can pay into a DB pension such as NHS. 

Albermarle

L9XSS said:

Regarding the small pots rule, could the existing pension be “split” by the provider RL if requested by the OP into one containing less than 10k? Not fully sure of the rules.....

AFAIK, only HL will do this. It is probably quite a lot of admin for little reward for the provider. Also it is against the spirit of the small pots rule so most providers will shy away from it for this reason.

dunstonh

Albermarle said:

L9XSS said:

Regarding the small pots rule, could the existing pension be “split” by the provider RL if requested by the OP into one containing less than 10k? Not fully sure of the rules.....

AFAIK, only HL will do this. It is probably quite a lot of admin for little reward for the provider. Also it is against the spirit of the small pots rule so most providers will shy away from it for this reason.

Several others on the intermediary side do it.   RL won't do it without an adviser involved.   So, that would likely be a no go in respect of RL as no adviser appears to be involved.