Minimum pension age is set to increase
The minimum pension age is set to increase to 57 under plans unveiled in a government consultation on February 11th. However, this consultation only refers to employers’ schemes and personal pensions, not the state pension, which starts at a later age.
When will the change take place?
Currently people aged 55 can access their retirement funds, but the Treasury plans to increase this. The recent consultation states that the proposed changes will apply from 6th April 2028, increasing the normal minimum pension age to age 57. The consultation highlighted that pension providers have flexibility regarding how and when to move to the new minimum pension age. This means that some schemes could increase the minimum age before 2028. The increase to the normal minimum pension age is in line with the increase in state pension age to 67
Why are they making the changes?
The planned change reflects increases in life expectancy and the likelihood of continuing to work longer. Raising the normal minimum pension age to age 57 encourages individuals to save for longer for their retirement. This helps them build greater financial security, which could reduce reliance on state benefits. Members of certain schemes, including the firefighters, police and armed forces will not be affected by the proposed change.
Have there been previous changes?
The minimum pension age of 50 was introduced in 2006. In 2010 this was increased from 50 to 55 to encourage people to work longer, given the increase in life expectancy.
This change may not be welcomed by everyone, particularly those intending to retire before 57. Should you plan to retire before 57, advice should be sought to review your retirement plans and options. Our Financial Services team can be contacted here for advice.