HMRC has confirmed changes to the minimum age at which Britons can access their private or workplace pensions, raising it from 55 to 57 effective April 6, 2028. The announcement was made in the official pension scheme newsletter and has prompted experts to urge pensioners to reassess their retirement income plans.
Who Is Affected by the New Pension Age Rule?
The normal minimum pension age (NMPA) will increase to 57 for most savers. However, those born before April 6, 1971 retain the right to access their pension benefits at age 55. Individuals born on or after April 6, 1973 will not be able to access their pension savings until they reach 57. For those caught in the middle—born between April 6, 1971 and April 5, 1973—a transition period applies.
Transition Rules for Those Aged 55 or 56 in April 2028
If you were born between April 6, 1971 and April 5, 1973 and will be 55 or 56 on April 6, 2028, you may still access funds already moved into drawdown. Similarly, if you are already receiving an annuity or a pension from a defined benefit scheme, those payments can continue. However, you will not be able to move new money into drawdown funds, set up a new annuity, or start taking a pension from a defined benefit scheme until you reach 57. If you regularly access your pension funds, phased payment plans will be halted in April 2028 until your 57th birthday.
Expert Reaction: Rachel Vahey of AJ Bell
Rachel Vahey, head of public policy at investment platform AJ Bell, commented: “We have known for many years that the minimum age individuals can access their private pension savings is going to increase to age 57 from April 2028. But it has taken five long years for HMRC to finally provide impacted pension savers with crucial details on how this change will affect their retirement planning.” She added that individuals born after April 1973 must wait until 57, but the update clarifies the impact for those born between April 1971 and April 1973.
Potential Perverse Incentive: Accessing Entire Pension Early
Vahey noted that the new rules could create a “perverse incentive” for those affected to access their entire pension savings before April 2028, taking their full tax-free cash entitlement and moving the remainder into drawdown. This would allow higher income payments before 57, but it also means missing out on additional tax-free cash growth. She explained: “Although individuals can take all their pension pot in one go, if they do not need all the tax-free cash immediately, there’s some advantage in only accessing part of the pot. That way they can leave the untouched pension to grow in a tax-free environment, meaning their tax-free amount should also grow.”
Practical Implications for Retirement Planning
The changes will disrupt some pension savers’ plans, particularly those taking regular ad-hoc lump sums or using phased drawdown. Vahey warned that the rules will “put a stop to those taking regular ad-hoc lump sums or in phased drawdown” and may encourage individuals to fully access their pension funds earlier than planned. Experts advise reviewing retirement income strategies to address any potential income gap caused by the delay in access.
