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July 23rd 2021

Pension freedom age to rise to 57 for tax free withdrawals

The government has confirmed that it is proceeding with plans to raise the normal minimum pension age from 55 to 57 years. The NMPA is the point when individuals can normally access their pension pots tax free. The change is expected to take effect in 2028.

Changes to the rules will be introduced in Finance Bill 2021/22 and the draft legislation will introduce a window so that individuals have an opportunity to join a pension scheme by 5 April 2023 where the scheme rules on 11 February 2021 already confer an unqualified right to take pension benefits below age 57.

The government also proposes changes to the transfer rules for members to retain their protected pension age following block and individual transfers where they transfer their pension to another provider.

There will be consultation on the draft legislation before it is introduced.

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