News and articles

Planning to retire at 55?

For financial professionals only

On 20th July 2021 the Government issued draft legislation that would see the Normal Minimum Pension Age (NMPA) rise to 57 on 6th April 2028(1). The NMPA is currently 55, and is the earliest age you can take benefits from your pension, under normal circumstances.

The Government’s ultimate policy objective is to see the NMPA fixed at 10 years younger than State Pension Age in future, although the two dates have not been formally linked in the legislation.

Check financial plans

It’s important to check the financial plans of clients born after 6th April 1971 (now 50 years old) and before 6th April 1973 (now 48 years old), to avoid the possibility that after April 2028 they are prevented (for up to 2 years) from taking pension benefits by this rule change. This could particularly impact clients taking benefits in stages from different providers as part of an overall retirement plan.

Parmenion SIPP

The draft legislation allows schemes to introduce a minimum pension age of 57 before April 2028 if they wish. We will not be doing so.

Our SIPP does not give an ‘unqualified right’ to take benefits at an earlier age than NMPA. Therefore, care should be taken transferring members into the Parmenion SIPP if they currently enjoy this protection in their existing scheme. This is especially important if taking benefits between age 55 and 57 is a key goal within their financial planning.

More detail to follow

We’re currently only discussing draft rules and changes to the Pensions Manual will follow later. Please contact us to discuss how the changes could impact any potentially affected clients.

(1) HM Treasury, Increasing the normal minimum pension age: summary of responses to the consultation on implementation, July 2021