What may impact me and many more like me though, is the fact that the normal minimum pension age by this point, is planned to be aligned with the ever increasing state pension age, although ten years younger. So at the same time the state pension age increases to 68 the normal minimum pension age should increase to age 58.
The link between state pension age and normal minimum pension age was planned to come into effect in 2028/29 but there has currently been no sign of any legislation, so we can live in hope that it won’t happen. The original announcement came about following a consultation in 2014 and legislation was expected in the next Parliament, but there is always a possibility that this has been shelved given the amount of tax revenue being gained from consumers accessing small pots at age 55, which according to the Retirement Outcomes Review Interim Report is ‘becoming the norm’.
All this extra revenue being generated earlier in people’s decumulation phase of the pension cycle will be hard for the Government to give up. I think for many accessing their pensions at age 55 is very young, but for others there are very good reasons and it seems wrong to restrict something that has been welcomed by consumers – not many pension changes are.
I have to say I don’t agree with raising the normal minimum retirement age again, it doesn’t feel that long since it went from 50 to 55. The pension freedoms are supposed to give people the freedom to access their funds when and how they see fit. This seems a step backwards, especially for those that may need to access some funds well in advance of their state pension age for whatever reason.
We wait to see if this will come and I hope that it doesn’t but given the fall out that we have seen from those that insist that they weren’t aware of the state pension age increases, then it is something that we shouldn’t lose sight of, given the way time flies by in the ever changing pensions world.
Claire Trott, Head of Pensions Strategy, Technical Connection