The government has confirmed that the normal minimum private pension age will increase from 55 to 57 in 2028.
The plans were first discussed in 2014 following the consultation on ‘Freedom and Choice in Pensions’ when the Government announced that it would introduce the increase to coincide with the rise in state pension age to 67. The reasoning behind the decision is said to be due to trends in longevity, a move to encouraging people to work longer and to ensure that pension savings are sufficient to provide for later life.
As with previous changes there will be transitional protections allowing some specified groups to continue to retire before the age of 57.
Partner at FPC, Bernice Blundell comments: “These new rules will inevitably add extra complexity to the pensions world. However, the 7-year timeframe gives savers plenty of time to review their financial plans and make preparations to offset the rise.
It’s a concern that we may see a growth in pension scams with people being encouraged to transfer their funds to access their benefits before they’re 57. As a result an even greater onus will be put on scheme administrators and trustees to protect their members from making potentially costly decisions.”
As legislation has changed over the years, pensions planning has evolved, as has the concept of “retirement” with flexible working patterns, second careers and phased retirement all now the norm. The role and significance of pensions has also changed and for most people planning for financial independence requires a broader approach with other income streams and assets being required to help fund longer term needs.
Our integrated approach to pensions, investment and estate planning ensures that you can still achieve your objectives despite constantly changing legislation so do get in touch if you have any queries about how this change may affect you.