If you were born on or after 6 April 1971, a key change to private pension rules is zooming into view.
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From 6 April 2028, the Normal Minimum Pension Age (NMPA) – the earliest point you can usually access your personal pension savings – will rise from 55 to 57 overnight.
At first glance, this two-year pushback may seem a minor tweak to the retirement savings landscape, not least because many savers wait until their 60s to begin drawing their pensions. But since the pension freedoms were introduced in 2015, people have taken a more flexible
approach to retirement planning, in some cases dipping into their savings before they stop working.
If you think you’ll need money
before 2030 and aimed to use your pension, you may need a plan B.
If you were born before 6 April 1971, you will have already reached age 57 before the rules change, so are unaffected. You can access your pension savings from age 55, as currently permitted.
If you were born on or after 6 April 1973, the earliest you can take your pensions will be age 57; unless you own pensions with certain protections. So, if you think you’ll need money before 2030 and aimed to use your pension, you may need a plan B.
The group that may need to give the change the most attention is those born between 6 April 1971 and 5 April 1973. Essentially, you’ll have a window between your 55th birthday and 6 April 2028 to access your pensions in some shape or form, otherwise the age you can take them will be delayed by two years.
Using the most extreme example, someone born on 5 April 1973 will have 24 hours to draw from their pensions or be forced to wait until 5 April 2030 to get their hands on the cash.
Note, the higher Normal Minimum Pension Age will apply to both Defined Contribution (DC) – where you save into a pot for retirement – and Defined Benefit (DB) – where you secure a guaranteed income.
Will all pension schemes and individuals be affected?
The short answer here is the vast majority will, but there are some exceptions.
The government has confirmed it will not apply to the public service pension schemes for the likes of the armed forces, police, and firefighters.
You can also access your pensions sooner if you meet the criteria for ill-health or serious ill-health.
Elsewhere, if your pension has a Protected Pension Age (PPA), this will remain in place, relieving you from the age hike. The types of pensions where these might be found are pre-2010 occupational pension schemes and section 32s. The scheme must have offered an unqualified right to draw benefits from age 55 on 4 November 2021.
For any older pensions that you may wish to access, it’s worth digging out the paperwork or contacting your scheme(s) to find out if you have a PPA. Be aware that if you transfer out of such schemes any PPA will be lost.
Why is the Normal Minimum Pension Age rising and will it hike again in the future?
According to the government, the Normal Minimum Pension Age hike is to stop people raiding their pensions too soon to ensure their savings “provide for later life” and boost the economy through “increased labour market participation”.