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Autumn Budget – where is it likely to impact the nation’s personal finances?

Minimum pension age hike delay

“The Treasury has got itself into a bit of a pickle over plans to increase the normal minimum pension age (NMPA) to 57 in 2028.

“Rather than simply raise the NMPA for all, policymakers have proposed a complicated protection regime for those who had an ‘unqualified right’ to access their retirement pot before age 57 on 11th February 2021.

“People will have until 5th April 2023 to transfer to a scheme with an unqualified right and retain a lower NMPA.

“This will create the ludicrous scenario where savers could have two different minimum pension access ages within the scheme.

“Such complexity risks undermining various key Government initiatives, including pensions dashboards, and will be a gift to scammers who will take advantage of the inevitable confusion it will create.

“The Budget might be the last opportunity for the Treasury to see sense and, at the very least, keep the NMPA rise out of the upcoming Finance Bill. This would give breathing room for a simpler, more sensible solution to be delivered.”

State pension age rethink

“Increases in the state pension age have been mired in controversy in recent years, particularly because of the impact on women born in the 1950s who argue they were not properly warned about the changes.

“The current state pension age is 66, with plans to raise this to 67 by 2028 and 68 by 2046 (although this could be brought forward to 2039).

“However, Prime Minister Boris Johnson used his Conservative Party conference speech to highlight regional differences in life expectancy as a key area of inequality and target for his ‘levelling up’ agenda.

“Furthermore, we have recently seen a sharp drop in average life expectancy – although this may be a temporary blip as a result of the pandemic.

“Against this backdrop, it is not beyond the realms of possibility the Government will announce a review of planned state pension age increases, with a focus on inequalities and the potential long-term impact of COVID.

“Any move to push back state pension age increases – or cancel them altogether – would likely be popular, although the costs to the Exchequer would be eye-watering.”

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