Proposed Changes To The Normal Minimum Pension Age

11th September 2021

Proposed Changes To The Normal Minimum Pension Age news article

In July, the Government published its paper on increasing the Normal Minimum Pension Age (NMPA) from age 55 to age 57 with effect from April 2028. This is to encourage more people to work longer to save sufficiently for retirement, due to people living longer.

NMPA is the earliest age from which people can draw benefits from their pension schemes.

The last change in NMPA was in 2010 when the age increased from 50 to 55, when the average life expectancy was 79.69 years. This has now increased to 81.26 years in 2021, with the average age at death to continue rising.

This change would coincide with the change to the State Pension Age from age 65 to 67.

The paper identifies that this will most affect individuals who are within 10 years of

retirement, as they will have less time to adjust and plan for the change.

However, there are some caveats to the proposed changes.

Members of the Police, Fire Service and Armed Forces schemes will not be affected.

Anyone else in a scheme with an existing protected pension age will see no change in respect of their current protections.

A new form of protected minimum pension age is proposed. This is expected to be an option for individuals who become members of a pension scheme after 11th February 2021 and before 5th April 2023, which contains an actual or prospective right under that pension scheme to any benefit from an age of less than 57, but not less than age 55. This would only be for pension schemes that include this in the scheme rules on or before 11th February 2021.

Anyone who meets the conditions for a protected pension age would have the protection applied to all their benefits under the relevant scheme, not just those benefits built up before 2028.

If an individual transfers their benefits from a scheme with such protection, it could be lost, although further detail on this is awaited from the Government.

It is important to review your retirement plans, especially if you are currently under age 57 and within 10 years of when you wish to retire. Our advisers can provide you with information on your expected income in retirement, along with recommendations on how to ensure that you have sufficient to live on when you do decide to take your pension benefits.

Contact your adviser on 01277 202222 or

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