Over a million people may find they have to wait two years longer than expected to access their private or workplace pension, an expert has warned.
The “normal minimum pension age” - which is the earliest age most people can start withdrawing money from their personal and workplace pensions - is rising from 55 to 57. Writing in his latest pensions advice column for This is Money, former pensions minister Sir Steve Webb explained this change “will happen overnight” on April 6, 2028.
This change could affect anyone born between April 6, 1971 and April 5, 1973. For some people, they will have a one-day window to access their pension before they have to wait another two years. Sir Steve, who is now partner at LCP, explained: “Suppose, for example, that you were born on 5 April 1973. In this case you will reach age 55 on 5 April 2028 and can therefore immediately access your pensions on your 55th birthday.
“However, if you miss that day (perhaps because you are busy celebrating your birthday) you will wake up the next morning to find that you now cannot touch your pensions for another two years.” There are some cases where your “normal minimum pension age” will remain at 55.
It all depends on if your pension scheme rules specifically say that you can access your pension at “age 55” rather than the current “normal minimum pension age”. Sir Steve urged pension savers to “be careful” if you are thinking of transferring your pension to a new scheme.
He said: “If you have a 'protected' pension age in your current pension, this can be retained if you transfer to a new pension. However, you need to make sure that your new pension provider is aware of this and has administrative systems set up to deal with it.” The changes to the “normal minimum pension age” does not affect your state pension.