In our article of 30th September, we reminded readers of the 2014 government announcement that the access to schemes such as personal pensions would be subject to a general restriction of no earlier than ten years before prevailing state retirement age.
Whilst the framework for this was established in legislation, the start date has been conspicuously missing, although, with planned increases in State Retirement Age, logic suggested the change would be effective from 2028.
It looks like our foresight was correct as today, 11th February 2021, HM Treasury have launched to formal consultation “Increasing the normal minimum pension age: consultation on implementation“. Within the title we focus on “implementation” – this tells us the consultation isn’t about the minimum age to access pensions increasing, its a consultation about the detail, the exceptions to rules (police, firefighters and armed forces) etc, which will come into force on 6th April 2028.
The Treasury consultation document states: “Increasing the normal minimum pension age reflects increases in longevity and changing expectations of how long we will remain in work and in retirement.” And “Raising the normal minimum pension age to age 57 could encourage individuals to save longer for their retirement, and so help ensure that individuals will have financial security in later life.”
The minimum pension age was introduced in 2006, the Treasury said, “to ensure a balance between the generous tax relief that the government provides to enable people to save for retirement and setting the right incentives for them to accumulate sufficient pension savings and not fall back on state support in retirement”.
It was increased from 50 to 55 in 2010 to encourage people to “work for longer”.
The consultation stated the government believes that schemes should be free to decide how and when to move to the new minimum pension age by 2028 – meaning some schemes could increase the minimum age before 2028.
The government has also set out a planned protection regime – meaning a member of any registered pension scheme who has a right under the scheme rules at the date of this consultation to take pension benefits at an age below 57 will be protected from the increase in 2028.
Please don’t hesitate to contact us if you’re concerned about how these changes may impact on your retirement plans.