05 Mar 2021

Proposed pension reforms

Amanda Cook

Financial Planning Director

As the government announces its intention to increase the minimum pension age to 57 in 2028, here’s how that could affect your current and future pensions.


On 12 February 2021, the government announced its intention to increase the normal minimum pension age (NMPA) from 55 to 57 as of 6 April 2028.  Having been in the pipeline for years, this announcement came as no surprise. However, a closer examination of the consultation paper reveals additional proposals that could impact retirement planning in the future.

How will this affect your current pensions?

A widely held assumption was that the minimum pension age would simply be changed for all pension plans (with the usual exemptions for some public sector schemes). In fact, the consultation paper proposes that current pension holders will have their minimum pension age protected.

So, everyone who holds a pension on 11 February 2021 (the date of consultation) which has a stated minimum pension age below 57 (which in most cases would be 55) would retain the right to access their pension at that age. The protected pension age would be scheme-specific and work similarly to existing protected pension ages.

How will this affect new pensions?

The consultation proposes that anyone joining a new pension scheme from 12 February 2021 onwards would have an NMPA of 57 from 2028 for that scheme. They may have other pensions that they already held on 12 February 2021, which they could therefore still potentially access before age 57.

How will this affect pension transfers?

Another proposal within the consultation paper is that from 12 February 2021, anyone who transfers to a new scheme would lose the right to take benefits from that pension before the age of 57 (assuming the original scheme offered that right), unless they completed a block transfer. This would present an additional consideration for people consolidating their pensions, who will need to take care not to lose their minimum pension age protection.

What action should you consider?

The consultation has recently ended, so we would anticipate draft legislation in the summer. It’s possible that none of the above will come to pass but, as a Treasury consultation document, this represents the government’s current thinking. At least for now, we must consider that it could become legislation.

Speak to your Financial Planner before taking action to discuss how the proposals might affect your plans.

About the author

To contact or read more about Amanda Cook, visit her bio here.

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