18 JUL 2023


Increase in the normal minimum pension age to 57

There has been much recent discussion in the UK media about the potential increase in state pension age to 68, which was cancelled, but remains on the Government’s agenda. What is perhaps less known in the wider world is the increase in the normal minimum pension age from 55 to 57 in April 2028.

What is the normal minimum pension age (NMPA)? Basically, it is the lowest age that an individual can access their pension scheme benefits (unless they are in an occupational pension with a special protected minimum retirement age). 

It may seem a little while off but, for advisers, it is important to think carefully about the impact of this change. Some clients will be unhappy at having to wait an additional two years to retire, but for others there are opportunities. We think the following are worth highlighting:

  • Additional 2 years of accumulation for members who have UK relevant earnings to take advantage of the recent increase in the annual allowance and maximise their contributions before retirement.
  • Members looking to transfer in other pensions and immediately put them into drawdown at 55 will not be able to do so – instead their minimum access age will be 57..
  • If you were born after 6 April 1971 but before 6 April 1973, you will have a window after your 55th birthday to access your savings before the NMPA increases to 57.
  • Where a pension has a lifestyling option, it will start moving investments into low risk investments 5 years before the retirement date. Any change in the retirement age could affect this.

IFGL Pensions will update the minimum default retirement age on their SIPP automatically for any members affected by this change. But it is a good time for members and their advisers to review the selected retirement date on their plan and ensure that they factor in the new minimum access age if they had planned to retire at 55 and will no longer be able to do so.