Increase in min pension age

Increase in minimum pension age

Matthew Barrand Retirement

The Government has confirmed that the normal minimum pension age will rise to 57 in 2028.

This intention was originally included in the pension freedoms consultation paper in 2014 (see wording below) but wasn’t then passed into the subsequent legislation.

The government… proposes to increase the age at which an individual can take their private pension savings at the same rate as the increase in the State Pension age. It is important people have the opportunity to plan properly for this change and so the government proposes to wait until 2028 (when the State Pension age will rise to 67) to fully implement this change. From 2028, people will not be able to draw their private pension benefits without a tax penalty until age 57, whether or not this is the point at which they stop work. From then on, the minimum pension age in the tax rules will rise in line with the State Pension age so that it is always ten years below.”

The only time a member can access their pension benefits before minimum pension age is if they are in ill-health, they have a protected pension age or have a certain specified occupation. Apart from this, a payment made before minimum pension age is an unauthorised payment and subject to hefty tax charges.