The UK Government are pondering on raising the minimum pension age to 57.
Government thinking of raising minimum pension age to 57: The move comes from increased longevity and the expectation on how long we will work and be in retirement. The decision will be in consultation and means the age will increase from 55 to 57. If passed it will come into affect from April 2028. The Government added the move will not take place immediately.
It added that private pension schemes may also wish to increase the normal minimum pension age (NMPA) to 57. They could do this sooner than 2028. The NMPA is the minimum age a pension saver can access their payments without incurring tax charges. However, the Government have announced there are currently no plans to change the rules on ill-health (taking the pension early).
A released consultation document said “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 age increase, if put into place, will not effect public service pension schemes for firefighters, police and the armed forces.
Head of pensions and savings at Interactive Investor, Becky O’Connor, said “Moving the goal posts like this is likely to cause concern for those approaching retirement and make planning harder for them. It’s a curveball at a key life moment for those approaching 50 who will be hit by this. When it comes to retirement, there’s no such thing as ‘one size fits all’.
People need some flexibility in when and how they access their pensions. The shifting of the minimum age for pension access underscores the benefits of using ISAs as well as pensions for retirement saving.”
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