Pension freedom age to rise

The pension freedom age is the earliest age at which you can withdraw cash from a private pension, without facing tax penalties. It is set to increase from 55 to 57 on 6 April 2028.

8 October 2021

The increase in the normal minimum pension age (NMPA), otherwise known as the pension freedom age, will affect both men and women. It is designed to encourage people to save longer for their retirement and help ensure their financial security in later life.

Pension schemes with ‘unqualified right’ to retire at 55

Pension schemes that had the right to take benefits at 55 written into their rules as of 11 February 2021 will be able to protect that age for existing members and any others that join such a scheme by 5 April 2023. This protection only applies if the scheme rules specifically gave an ‘unqualified right’ to retire at 55.

Those born before 6 April 1971

People born before 6 April 1971 should be unaffected by the change – which is being introduced in the government’s Finance Bill next year – because they will reach 55 by April 2026 and 57 before April 2028.

Specific advice should be obtained before taking action, or refraining from taking action, in relation to this summary. Please talk with your usual Shipleys contact or get in touch with one of our specialists shown on this page.

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