Pension change April 2028

[the shadow 36]

Does anyone know with the new rule changing in April 2028 that u will have to wait until your 57 at the earliest to access your pension how this will effect people who turn 55 before this new rule takes effect. Will our pension scheme likely have a protected pension age and so this new change won't matter or will there be a situation where if u turn 55 say in 2027 u would b in a strange limbo as u still wouldn't of turned 57 by the time the new rule is implemented. Sorry if this is confusing and I'm not explaining my concerns in a better way

[RobertT]

The rules associated with a protected pension age are quite confusing, but as far as I'm aware none of the RM pension schemes do have a protected age. Clarification direct with them is probably best.

This explains how it works in fairly simple terms: https://www.aviva.co.uk/retirement/pens ... nsion-age/

My understanding is it's the age you start accessing your pension that's the important thing. So if you first take it at 55 but you're still under 57 in April 2028, it doesn't mean you'll be in limbo and and it doesn't mean your pension payments will stop.

[Alfietherat]

Are Pension statement’s(all parts) being sent out this month?

[the shadow 36]

Thanks for your reply Robert , if someone was say 55 in 2026 and took their nra 60 they would lose 25 % of its value. If the same person however waitied until after April 2028 would they lose 15 % as it would be now or because of the change would they still lose 25% at this point too

[RobertT]

The early payment reduction is 5% for each year you take your Age60 and Age65 pensions before NRA. So if you can't take your Age60 until 57, the maximum reduction is only 15%.

The max reduction for Age65 would therefore be 40%.

[the shadow 36]

Is there not a chance then that in 2028 the nra will change to 62 and 67 to allow for the increase to 57

[RobertT]

No!
The NRA's of 60 and 65 are set in stone and as far as I'm aware can't be changed, even if they wanted to!

And why would they need to allow for the increase to 57 anyway?

[Andy.T]

Hi all,

New member here, I have a few years RM service from 1996 to 2003 and am in Section C of course.

In case it's useful to anyone, I've had it confirmed in writing from RMSPS (eventually) that Section C does indeed appear to have a protected pension age of 55. It should therefore be unaffected by the rise in Minimum Pension Age in April 2028.

The reason for this is that the scheme's existing rules already provide an "unqualified right" to retire at 55.

This means that the right to retire at 55 was never subject to special permission or discretion from the trustees, or whatever. It is a right explicitly provided to everyone in the rules of the scheme. This "unqualified right" is the test that the legislation is expected to apply to schemes.

See full text below, hope this is helpful to someone,

Andy

There are new rules coming into existence from April 2028 onwards regarding a change to the minimum pension age. These rules will implement a rise from age 55 to age 57 for the earliest date that pension scheme members can claim payment of their benefits unless they were born before 6 April 1971.

As it currently stands, protection is to be given if a scheme’s rules specifically gave an ‘unqualified right’ to retire at 55. This means a right to claim benefits from age 55 onwards without needing the consent of the trustees, the scheme administrator or employer to take benefits at this age. This is likely to be a more common feature in occupational schemes.

The closed Royal Mail Statutory Pension Scheme (RMSPS) is an occupational scheme and allows members to voluntarily claim their benefits from age 55 onwards without needing consent to do so, but any benefits claimed before their respective Normal Retirement Age of 60 or 65 will be subject to reduction for early retirement.

Based on current information we do not anticipate that the upcoming change will impact RMSPS as a scheme. If there is any change to the minimum pension age for RMSPS this will be communicated to all scheme members as appropriate.

[RobertT]

That's interesting Andy!
Thanks for sharing.

Reading that and the official government info on the subject, it seems RMSPS benefits(up to 2012) could still be taken at 55 even after April 2028. Because no consent from the trustee or employer is required when taking your pension before NRA.

However, taking a look at the RMPP 'member guide to benefits', that suggests company approval is needed for taking those benefits(2012-2024) early. Plus the website states access age is increasing to 57 in 2028.

The current rules are that all Age60 has to be taken at the same time and all Age65 at the same time. But as Age65 in particular and to a lesser degree Age60, are split between RMSPS and RMPP, an access age of 57 might effectively apply to all benefits anyway?
Unless you only have pension with RMSPS.

I suppose they still have another two years until the rise to 57 applies, but there really should be some sort of proper communication about this.


Government info:
https://www.gov.uk/hmrc-internal-manual ... /ptm062215
https://www.gov.uk/hmrc-internal-manual ... /ptm062210

[tractorboy2]

As the state pension age is currently 66 , wouldn't this make the earliest you can take your pension 56?
Why wait till it changes to 67!

[RobertT]

As the state pension age is currently 66 , wouldn't this make the earliest you can take your pension 56?
Why wait till it changes to 67!

The current plans are:

The state pension age is due to increase from 66 to 67 on a phased basis from April 2026 to April 2028.

Once that process has been completed, from April 2028 the minimum access age for all other pensions(unless there's an exception) will then rise from the current 55 to 57, and remain 10 years below state pension age.
56 is missed out!

State pension age is due to increase to 68 from 2044 to 2046, but is widely expected to be brought forward.
There is a review ongoing to decide on that!

Government have previously said any changes in state pension age will be communicated at least 10 years in advance.

[NorthernBoy]

What’s clear from this thread is that the age for accessing a personal pension is increasing. If I was in my 20s now I would be working on the assumption that access to a pension will be nearer 60 by then. I would still be investing in a pension but I may put more money into isas as they will allow you better flexibility to get the money out earlier.

The government is clearly trying to reduce the no of people in their 50s from retiring early to protect the tax take. Make your own plan to suit your needs.

[heapsy]

What’s clear from this thread is that the age for accessing a personal pension is increasing. If I was in my 20s now I would be working on the assumption that access to a pension will be nearer 60 by then. I would still be investing in a pension but I may put more money into isas as they will allow you better flexibility to get the money out earlier.

The government is clearly trying to reduce the no of people in their 50s from retiring early to protect the tax take. Make your own plan to suit your needs.

You make some importants points Northern. A S&S ISA would help bridge the gap until State pension. Especially with the increase in the minimum pension age. The government, who ever they are, are desperate to keep people working longer. Not just for the tax, but to pay you for fewer years when you are retired.

[yellowbelly]

What’s clear from this thread is that the age for accessing a personal pension is increasing. If I was in my 20s now I would be working on the assumption that access to a pension will be nearer 60 by then. I would still be investing in a pension but I may put more money into isas as they will allow you better flexibility to get the money out earlier.

The government is clearly trying to reduce the no of people in their 50s from retiring early to protect the tax take. Make your own plan to suit your needs.

I've told my kids who are early twenties not to expect a state pension at all and that even early access to private pension will be at least 65!

[milly]

Pensions are becoming obsolete, no sane person would commit any significant sums to any Pension knowing that the Government can, and will keep moving the goalposts whenever they feel like it.
Still quite a few people on here want more Socialism, so they have to be resigned to the fact that their Pensions will be used to pay for it.
The Netherlands are introducing a tax on unrealised gain in 2028, utter madness.
You will own nothing and be happy.