What happens if you straddle pension age increase?

DRS1

A stupid question but presumably when it says "aged between 55 and 56 (inclusive)" it does cover a 56 year old? I am not sure why they didn't say aged between 55 and 57.

NoMore

https://forums.moneysavingexpert.com/discussion/comment/82097228#Comment_82097228

The (inclusive) covers 56. I assume because legally this legislation doesn't actually apply to age 57 as your free and clear then. Legal documents can get weird like this. They have to be precise and that can lead to what people would think of as odd phrasing.

mrklaw

Diane Sullivan has a video up if that helps. she’s always very practical with this kind of stuff

https://youtu.be/xeP_e3_o8Ug

ader42

This is really harsh having to 100% crystallize thereby giving up all future potential 25% TFC gains.

If my other half has £100k in her SIPP at age 55 and has to crystallise it all to access any of it she will cap her lifetime TFC at £25k - a very bad move imho, I will tell her to not touch it and leave it alone whilst we live off my money instead and likely just keep feeding her SIPP too.

mrklaw

you don’t have to 100% crystallise. But you may want to crystallise enough to cover until you’re 57 so a couple of years? If you’re going to use FAD you may have planned to crystallise 1 year anyway

NoMore

https://forums.moneysavingexpert.com/discussion/comment/82101974#Comment_82101974

Bit dramatic, its two years at most of withdrawals you would need to crystallise, not all of it. The uncrystallised portion will become available again at 57.

ader42

Ok, well I guess I should chekc things out a bit more after watching a youtube video 🤣

It is still pretty bad for those wanting to UFPLS

SnowMan

The consultation is mentioned in Pension Schemes newsletter 184 but there's nothing new there

Normal minimum pension age

On 6 August 2026, HMRC published draft regulations for a technical consultation on the changes to the normal minimum pension age.

The draft regulations introduce provisions so that in specified circumstances, members who were aged 55 or 56 on 5 April 2028 are treated as having reached age 57 immediately before certain pension payments are made. The changes are intended to ensure that specified pension benefits and lump sums paid on or after 6 April 2028 remain authorised payments for tax purposes where the relevant entitlement arose before the normal minimum pension age increase takes effect.

This consultation closes on 28 September 2026. Replies should be sent to: policypensions@hmrc.gov.uk

Triumph13

https://forums.moneysavingexpert.com/discussion/comment/82101974#Comment_82101974

It also makes no difference at all whether you take the tax free cash now, or later, apart from any tax paid on growth / income before you can get it reinvested in an ISA.

As an example, lets say she crsytallises £80k now vs in x years' time and that valuations double in the meantime. The £20k TFLS has grown to £40k in the ISA. That's exactly the same position as if the £80k had grown to £160k in the pension and she then took the TFLS.

If anything, it's better to take it out sooner rather than later as it's easier to get it into an ISA when the number is smaller.