What a difference a day makes

Financial Planner
Shaun Brennan DipPFS BSc(Hons)
Shaun has been looking after clients since 1988 and in that time has helped many families and business owners plan for their future and achieve their goals. Shaun was also the pioneer of our inaugural ‘Joined-Up-Expertise’ event for business owners.

The normal minimum pension age is increasing for most people on 6 April 2028. This will affect people born after 6 April 1971. The Government originally announced its intention to increase the normal minimum pension age from age 55 to age 57 back in July 2014 with the legislation required to make the change included in The Finance Act 2022. HMRC’s website states that the objective here is to ensure that this “measure supports the government’s fuller working lives agenda and has indirect benefits to the economy through increased labour market participation, while also helping to ensure pension savings provide for later life”. A protracted way of saying, people are living longer!

ARE THERE ANY EXEMPTIONS? Yes, there are. Uniformed services such as naval, military or air forces of the Crown (including army reserves), police forces other than the Civil Nuclear Constabulary and firefighters are not affected by the increase. It’s also worth noting that there is no change to the age that benefits can be paid on the grounds of ill-health.

WHAT DOES THIS MEAN IN PRACTICE? Even more careful planning will need to be undertaken by those aged 55-57 who have not yet taken pension benefits in the run up to 6 April 2028. It’s a ‘use it or lose it’ type situation in that if you’re over 55 you can start to take benefits any time you want to up to this point, but if you haven’t by 6 April 2028 then you will need to wait until you are 57 to have the option again. The worst affected therefore being people who turn 55 on 7 April 2028.

Additionally, in 2028 the State Pension age is increasing to 67 and there have been plenty of headlines about this over recent years. Most of our clients aren’t willing to wait until age 67 to be retired and so, as ever, the important thing is to plan your financial freedom by ensuring that your private pension provision can sustain you in these earlier years of retirement (be that from 55 or 57) in the run up to your State Pension subsidising you once you reach 67 (currently 66).

Remember, the State Pension is not something which most people would wish to live off in isolation, it’s more a survival, than a living pension. So, educate your friends and extended families about this legislation and feel free to contact us if we can assist people in accessing benefits before the timescale is out of their control.

Approver Quilter Financial Services Limited & Quilter Mortgage Planning Limited. 28/03/2024

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