Following its announcement in 2014, this measure increases the normal minimum pension age (NMPA), which is the minimum age at which most pension savers can access their pensions without incurring an unauthorised payments tax charge unless they are retiring due to ill-health, from age 55 to 57 in April 2028.
The government consulted on the implementation of the increase and a proposed framework of protections for pension savers who already have a right to take their pension at a pre-existing pension age on 11 February 2021. The consultation closed on 22 April 2021 and received 142 responses.
This measure supports the government’s fuller working lives agenda and has indirect benefits to the economy through increased labour market participation, while also helping to ensure pension savings provide for later life.
Legislation will be introduced in Finance Bill 2021-22 to provide a framework of protections and increase the NMPA from age 55 to 57.
The legislation introduces an increase in the NMPA to 57 from 6 April 2028. Following publication of the draft legislation, the government carefully considered further representations and concerns it received from industry regarding the length of the window for individuals to join a protected scheme. The legislation will now protect members of registered pension schemes who before 4 November 2021 have a right to take their entitlement to benefit under those schemes at or before the existing NMPA. The legislation exempts members of the firefighters, police and armed forces public service schemes and for protected members it reduces the restrictions on retaining a protected pension age following a block or individual transfer.