What happens if you straddle pension age increase?

Fruga

On 6th April 28 minimum pension age increases to 57. My DOB is Oct 71. If I start accessing a DC pension from Oct 26 (age 55) can I continue? Or on 6th April 28 (age 56) will there be limits on how I can access my pension? What are the guidelines? I'm thinking I would be able to access crystallised funds in a drawdown account, but what if I'm just doing ad-hoc UFPLUS? Could I continue doing that post 6th April when I'll be 56, but the pension age will have moved to 57? I can't find any guidance online on the technicalities.

artyboy

There was another thread recently with exactly the same question and the view from more expert posters than me was that if you were originally entitled at 55, then you can continue even after the rules change.

molerat

Fidelity have guidance and the answer is no one knows !

Born between 6 April 1971 and 5 April 1973  As you'll be 55 before 6 April 2028 you'll be able to take your pension benefits at any time from your 55th birthday up to 6 April 2028. It's currently unclear whether you'll have to stop taking pension payments after 6 April 2028 (such as regular pension drawdown payments) until you reach the age of 57. This page will be updated once the government provides updates on how this will be handled.

https://www.fidelity.co.uk/normal-minimum-pension-age-nmpa/

Fruga

Many thanks this was also my opinion but that's all it is! I don't seem to have any sort of protected retirement age (seems to relate more to the scheme itself as to whether that applies) If anyone has pointers to anything tangible, in terms of a reference that would be really useful. I could also try ringing my pension provider but suspect I would be fobbed off as needing advice - which of course I don't, I just want to understand the mechanics, I'm not after a recommendation as such.

Fruga

molerat said:

Fidelity have guidance and the answer is no one knows !

Born between 6 April 1971 and 5 April 1973  As you'll be 55 before 6 April 2028 you'll be able to take your pension benefits at any time from your 55th birthday up to 6 April 2028. It's currently unclear whether you'll have to stop taking pension payments after 6 April 2028 (such as regular pension drawdown payments) until you reach the age of 57. This page will be updated once the government provides updates on how this will be handled.

That's very useful, I'll certainly keep an eye on it. You would think this would have been thought about surely? Easiest option would be to say if you hit 55 before April 28 you have protected status?

Grumpy_chap

Fruga said:

On 6th April 28 minimum pension age increases to 57. My DOB is Oct 71. If I start accessing a DC pension from Oct 26 (age 55) can I continue? Or on 6th April 28 (age 56) will there be limits on how I can access my pension? What are the guidelines? I'm thinking I would be able to access crystallised funds in a drawdown account, but what if I'm just doing ad-hoc UFPLUS? Could I continue doing that post 6th April when I'll be 56, but the pension age will have moved to 57? I can't find any guidance online on the technicalities.

I am in exactly this position and I asked my IFA.  His response was that he could not see any specific guidance that covers the situation.  His assumption is that if I retire (start drawing pension) in the few months between 55 and April 2028, I can stay retired (continue drawing pension), but if I have not retired (start drawing pension) before April 2028, then I would need to wait until 57.

Hopefully, there will be something that formalises this soon as it could be a big issue to get wrong on an "assumption".  

Of course, there are those that would suggest the changes don't apply to anyone that did not receive a personal letter

Fruga

Grumpy_chap said:

Fruga said:

On 6th April 28 minimum pension age increases to 57. My DOB is Oct 71. If I start accessing a DC pension from Oct 26 (age 55) can I continue? Or on 6th April 28 (age 56) will there be limits on how I can access my pension? What are the guidelines? I'm thinking I would be able to access crystallised funds in a drawdown account, but what if I'm just doing ad-hoc UFPLUS? Could I continue doing that post 6th April when I'll be 56, but the pension age will have moved to 57? I can't find any guidance online on the technicalities.

I am in exactly this position and I asked my IFA.  His response was that he could not see any specific guidance that covers the situation.  His assumption is that if I retire (start drawing pension) in the few months between 55 and April 2028, I can stay retired (continue drawing pension), but if I have not retired (start drawing pension) before April 2028, then I would need to wait until 57.

Hopefully, there will be something that formalises this soon as it could be a big issue to get wrong on an "assumption".  

Of course, there are those that would suggest the changes don't apply to anyone that did not receive a personal letter

Ok well at least that clarifies there's no point paying someone to ask this question, the Fidelity link will hopefully give us the answer in time. 

It will change what I will do. I was planning on UFPLUS to maximise tax efficiency but now I'm thinking of taking the 25% tax free lump sum straight away to cover any potential drought in being able to access the pension. It really is a ludicrous situation.

FIREDreamer

Obviously you should be able to continue drawing down from a crystallised pot. Crystallising further uncrystallised money may not be so clear cut?

Audaxer

It seems incredible that if you are eligible to access your pension at 55, you could then be stopped accessing it in April 2028 if you are not yet 57. You would think that would have been thought through and examples to cover that situation be in the guidance.

Sea_Shell

I'm a "late 71" too, so in the same boat.

Will be interesting to see how things play out.

I plan to get as much out as I can tax free, asap.   25%, plus PA.    Then shove it in my (our) ISAs.

Just need to time it (March) so that they don't deduct tax, which I then have to wait to reclaim.

Silvertabby

Last time this happened was 1 April 2010, when the minimum pension access age shot up from 50 to 55 overnight 

No-one already in receipt of DB pension benefits or an annuity had their pensions stopped just because they were under 55.

May be different for drawdown, though?