Pension access from 55 to increase

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In  2014 the government announced that the ability to access 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 established 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 is well known that the government is working on a comprehensive pensions bill which is likely to be put before parliament over the coming months and we note that on the 28th August, the Chair of the Parliamentary Work  and Pensions  Select Committee [Stephen Timms] made a formal written question asking

'''To ask the Chancellor of the Exchequer, what plans he has to increase the minimum age at which people can access their private pension under the tax rules; and if he will make a statement''

Stephen Timms MP [Labour]

Mr Timms’ question has been formally answered today [3rd September 2020] by the Economic Secretary to the Treasury, John Glenn, as follows:

'''In 2014 the government announced it would increase the minimum pension age to 57 from 2028, reflecting trends in longevity and encouraging individuals to remain in work, while also helping to ensure pension savings provide for later life. That announcement set out the timetable for this change well in advance to enable people to make financial plans and will be legislated for in due course.''

John Glenn MP [Conservative]

Clearly much can change between now and 2028, but given the consistency of the response to the policy, and the potential to enshrine in the forthcoming pensions bill, we tend to think this is a date that people, particularly those born between 1973 – 1980 should take particular note of, as current plans may be disrupted.

Full details of the question and answer can be found on the parliamentary website here: https://questions-statements.parliament.uk/written-questions/detail/2020-08-28/81494

What does this mean for clients?

Hopefully not much; but we remember the Pensions Act 1995 which introduced phased equalisation of state retirement ages for men and women, giving , 15 years advance notice of the intention to start increasing women’s state retirement age between 2010 and 2018. We are also very aware of the anger and discontent from the WASPI women who argue that the changes were not communicated adequately enough.  We’ll remind our clients of this highly likely increase from age 55 to age 57, and where a client’s plans are likely to be impacted, we’ll remodel the retirement options and choices for them.

Remember, we’re hear to support you, so please get in touch if you have any queries.

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