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Aegon warns of unintended consequences as HMT responds to consultation on increasing normal minimum pension age

Photo of Steven Cameron

Following last week’s revealing report that 7 in 10 adults were unaware of plans to increase the minimum pension access age from 55 to 57, the Treasury has now published the outcome of the consultation. Check out why Aegon’s Steven Cameron believes that these proposals are “highly contentious”. 

Steven Cameron, Pensions Director at Aegon (pictured) comments:

“The Treasury’s proposals around implementing the previously announced increase in the normal minimum pension age from 55 to 57 proved highly contentious. While the provisions offering a protected pension age to those with an existing unqualified right to access age of 55 were clearly well intentioned, they raised a number of unintended consequences including legal uncertainty and complex communication challenges.

“One particular concern was that individuals who do have an unqualified right might have been put off transferring to a better value scheme in future if by doing so they lost the protection. This seemed at odds with other Government pension policy. We welcome confirmation that the Treasury intends that individuals will retain a protected pension age following both block and individual transfers.

“Another particularly contentious point was the proposal to backdate changes once finalised to 11 February 2021, the date of the consultation. We welcome the new window up until 5 April 2023 which will allow individuals to benefit from an age 55 protected pension age if by then they join a scheme which, as at 11 February, already offers an unqualified right.

“These amendments to the original proposals look helpful, although scheme rule wordings will need assessed against the draft legislation to check if the intent is delivered in practice.”

 

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