The Government has made a last-minute U-turn on proposals to allow savers to dodge a planned increase in the minimum pension access age from 55 to 57 in 2028 (Written statements – Written questions, answers and statements – UK Parliament)
Under previous plans, anyone who transferred to a scheme which offered an ‘unqualified right’ to a minimum pension access age below age 57 by 5th April 2023 would have been able to retain the lower age
However, the Government has today closed the window – meaning only transfers initiated before 4th November 2021 can potentially qualify for a lower minimum pension access age
Policy shift should reduce the risk of scammers taking advantage of the confusion – although unnecessary extra complexity has still been added to the pension system
Tom Selby, head of retirement policy at AJ Bell, comments: “The Government has made a colossal meal out of increasing the minimum pension access age, culminating in today’s last-minute change to the rules.
“Whereas under proposals published a few months ago anyone who transferred to a scheme with a ‘protected pension age’ by 5th April 2023 would have been able to retain a lower normal minimum pension age, this will now only apply to transfers initiated before 4th November 2021 (today).
“This is good news and should reduce the risk of scammers taking advantage of this Government-induced confusion to defraud savers.
“It will also mean fewer people make decisions about their retirement pot based purely on the minimum access age when in reality other factors such as costs and charges are usually far more important in delivering long-term value.
“However, we are left with the ludicrous situation that those people who are today in a scheme with a protected pension age and later transfer might end up in a scheme with two different minimum pension access ages. As such, the complexity created by this change will remain.”