Normal minimum pension age to reach 57 by April 2028
15 February 2021
HM Treasury has published an open consultation, which reconfirms the fact that the normal minimum pension age will increase from the age of 55 to 57 by April 2028. The consultation is also requesting views on the proposed protection regime, which will ensure that certain scheme members retain their current rights.
The normal minimum pension age is the minimum age at which the majority of pension savers are able to access their pensions without being hit with an unauthorised payments tax charge. This does not apply in scenarios where they are taking their pension due to ill-health. Similarly, the increase to age 57 will not be applicable to those who are members of the firefighters, police and armed forces public service pension schemes. The proposal is that existing scheme members will still have the right to access their pensions at 55, but those who become members of schemes following the date of the consultation (12 February 2021) will be subject to the updated rules.
It is hoped that this move could prompt individuals to save for longer into their retirement fund, subsequently ensuring that they have greater financial security later in life. This increase also reflects changes to expectations surrounding how long individuals spend in work, and also the length of time that they will spend in retirement. The increase will maintain a ten-year gap between the point at which an individual is entitled to access their private pension and the state pension age.
The consultation proposes that schemes will be able to choose how they implement the rise, but that the increase must be achieved by April 2028.
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