How do the changes to minimum pension “retirement age” impact me?

NOTE: This post is more than 12 months old, and the information contained within may no longer be accurate.

The age that most people can access their pension benefits is currently 55 and the government has recently announced proposals to increase this to 57 from 6 April 2028.

All the proposals can be found in the government consultation document which is here.

There is the potential for transitional protection. Such that anybody with a pension, as at 11th February 2021, can have their minimum pension age protected at 55.

This may benefit some, but if the pension holder transferred to another scheme the current proposals suggest that the protected retirement age would be lost. This is common to what has happened through previous changes to minimum retirement age and other similar protections.

Historically some may have benefits protected if moving pensions through a “buddy transfer” system. This allowed further protection to allow for schemes winding up, restructuring benefits, or other similar situations.

Any individual who starts a new pension after 11 February 2021, and who are 55 after 5th April 2028 (i.e. born after 6th of April 1973) will have to wait until at least 57 before accessing their pension savings, under the proposals.

There is one principal exception to minimum pension ages, and this for those in very poor health. These changes aim to impact those looking to draw pension benefits early – the intention to keep, broadly speaking, 10 years before accessing a pension and State Pension Age.

There are many reasons as to why pensions should not generally be taken before other assets, and given this is only a consultation the above proposals just highlight the potential risk rather than something individuals should be planning towards now. However, if pension consolidation or other restructuring is a consideration for you the consultation paper should not be ignored and we will be happy to assist in this area of complex advice.

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26 Apr 2024

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