Change to Normal Minimum Pension Age – back to where we started

In our blogs of 2 March and 22 July we discussed the planned increase to normal minimum pension age (NMPA) from age 55 to age 57 and the proposed extension of the protected pension age (PPA) regime.

Following the Autumn Budget 2021, on 4 November the Government published the Finance Bill 2021/22. As expected, the Bill includes a clause which increases NMPA from age 55 to age 57 with effect from 6 April 2028, but as a surprise to most of us who work in the pensions sphere, the proposals to allow individuals a window of opportunity (until 5 April 2023) to join or transfer into a pension scheme which could offer a PPA have been dropped.  This takes us back to the position outlined in our 2 March blog.

A statement issued by John Glen MP, Economic Secretary to the Treasury on 4 November explained that the proposals for the window of opportunity for people to join or transfer to pension schemes for the purpose of obtaining a PPA of 55 were dropped after stakeholders expressed concerns about possible adverse impacts on the pensions market and pension savers.

As a result, from 4 November 2021, anyone who is not already a member of a pension scheme which gives members the right to take pension before age 57, or who had not made a request to transfer to a pension scheme with a PPA of 55 or 56 before 4 November, will have a NMPA of 57 with effect from 6 April 2028.

As with the previous increase to NMPA from age 50 to age 55, block transfers of members from one pension scheme to another which meet legislative conditions will not result in members losing the right to take pension from age 55.