More pension age changes on the horizon – when can you access your retirement savings?

Pension: Expert gives advice on preparing for retirement

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As people approach the end of their working lives, it is natural for them to start to think about when they will choose to retire and access their private pensions. Some Britons might be planning on retiring in their 50s, but they are restricted on when they can draw their cash.

The age at which Britons can access their private pensions is dictated by the normal minimum pension age (NMPA).

This is the earliest age people can draw money out of their pension pot without facing tax charges.

The NMPA is currently 55, as it has been since 2010, when it was increased from 50.

First introduced in 2006, the NMPA is set to rise once again in 2028, up to 57.

People should be aware that the NMPA is different from the state pension age, which is the earliest age pensioners can begin receiving state pension payments.

The state pension age is currently 66 in the UK for both men and women.

The decision to increase the NMPA was announced back in 2014 to coincide with a rise to the state pension up to age 67.

However, not everyone will be impacted by the NMPA changes in the same way.

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This is because it is based on the specifics of each individual’s private pension scheme, they may be able to retain an NMPA of 55 when the changes kick in.

Those who were on a pension scheme with a protected NMPA of 55 as of November 4, 2021 will still be able to draw from their pot at this age after 2028.

Originally, the Government had planned to let Britons retain the lower age by transferring their pension to a scheme with an unqualified right to a NMPA of 55 before April 5, 2023, but they later decided to bring the deadline forward.

Anyone who wants to find out whether their NMPA will stay at 55 or jump to 57 in 2028 should contact their individual pension provider.

This could be important to check, as people who access their pension before their NMPA may be hit with unauthorised payment charges.

Of course, there will be many people who are not able to draw their pension at age 55 or 57, as they may not have enough money saved to retire that early.

With people having more freedom to access their pensions as they desire (once they reach their NMPA), new rules are set to come into effect from June 2022 which will require pension providers to help their customers make informed decisions.

Providers will have to offer to book their customers an appointment with Pension Wise when they are looking to access their retirement savings for the first time.

Pension Wise is an online service, backed by the Government which offers free guidance to Britons aged 50 and over.

When the changes come into effect in June 2022, pension providers will have to:

• Refer customers to Pension Wise guidance

• Explain the purpose and nature of the guidance

• In most cases, offer to book an appointment on behalf of their customers to receive guidance from Pension Wise, or give them the information which can help them book their own appointment.

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