A finance expert has issued a warning to anyone with a pension, saying some could be ‘locked out’ from accessing their cash ahead of a major change to the law. Rowan Harding, a financial planner with Path Financial, says many still don’t know about an alteration to personal pensions, due to come into effect from 2028.
At present, rules state you must be 55 before you can claim your personal pension, as that is the Normal Minimum Pension Age (NMPA). But from April 6, 2028, that age is set to rise to 57. That is unless your occupation already has a protected retirement age in place or you are claiming because of ill-health.
The change will affect those born after 5 April 1973. Those born between 5 April 1971 and 5 April 1972 will have a window from the date of their 55th birthday to 6 April 2028 to take their benefits. Rowan is urging people to check their pension plan terms and conditions and if necessary to make plans to mitigate the financial impact of the change.
She has also told people that they can still claim their pension before the age of 57 so long as they sign up to a pension scheme before 5 April 2023 and the rules stipulate that they can take it out from the age of 55. If they do this after 5 April 2023 or the rules don’t mention Normal Minimum Pension Age of 55, then they won’t be able to. They also won’t be able to if the scheme did not have the rules in place before 11 February 2021.
Rowan said: “Although we’re just over five years away, this change in the rules to private pensions shouldn’t be left until the alteration nears. People should check how much they’re putting into their private pension and consider whether it’s worth investing in something else if they need to access their money sooner.
“Don’t be locked out of your money because you haven’t made the necessary moves when it comes to your pension.”
A Government spokesperson wrote in a consultation on the issue of raising the NMPA: “This is consistent with the approach taken when the NMPA rose from 50 to 55 in April 2010 and gives individuals sufficient time to make arrangements should they wish to do.”
They added: “Raising the NMPA is necessary to reflect long-term demographic changes and reflects the changing expectations of how long people will remain in work and in retirement.”
