Proposed raise to minimum pension age to 57 in 2028

Lucy Dunbar, partner, has commented on the consultation to raise the minimum pension age to 57 in 2028: “This consultation will give welcome clarity and certainty on how the proposed new minimum pension age regime will work.  Members, employers and pension schemes will all need to prepare for the rise in minimum pension age sooner rather than later.  This change may have a significant impact on the retirement plans for members currently making pension savings, particularly those in their late 40s, who may be prevented from taking their pension savings at the age or in the way that they had intended.  Scheme and employer communications will need to be updated to reflect this change so that affected members and employees are made aware and can factor this into their current and future retirement planning.

The proposed new protection regime, enabling existing members who have a right to take benefits before age 57 to continue to do so, is more flexible than the protections put in place back in 2010 when minimum pension age first rose to age 55, and better reflects the retirement freedoms available to members.  However, under the proposals, some existing members are likely to still be prevented from accessing their chosen retirement flexibility before age 57, even if their right to take benefits early is protected, due to the fact that protection will be lost on an individual transfer. So again, early communication of this potential barrier will be key so that members can plan accordingly.”