However, Aegon says the changes still add complexity for members and schemes.
Steven Cameron, Pensions Director at Aegon, (pictured) said:
“We’re pleased that the Treasury has listened to widespread concerns over aspects of its controversial proposals around how to implement an increase in the Normal Minimum Pension Age. This is the earliest age when people can typically access their pension and with a few exceptions, will increase from 55 to 57 from April 2028.
“The Treasury had proposed transitional arrangements seeking to ‘protect’ a small minority of individuals who are in schemes whose rules by sheer accident of history give an ‘unqualified right’ to take benefits at age 55. The way the protections were previously drafted, someone joining a scheme with such protections before 6 April 2023 would have retained the right to the earlier access age. This could have distorted the market, encouraging individuals to seek out such schemes before the cut-off date even if better value alternatives were available.
“We support the Treasury removing this ‘window’ by bringing forward the cut-off date to today, 4 November. This means only those already in schemes offering an unqualified right will retain the right to access that pension before age 57.
“However, changing to a new normal minimum pension age will still create complexity for members and schemes. If a member in future transfers between schemes, they may find part of their benefits can be taken from say age 55 while other parts won’t be accessible until age 57. This will complicate communications to members as well as record keeping within schemes.”