Millions of pension savers face a potential two-year delay in accessing their retirement funds unless they act before April 2028, when the Normal Minimum Pension Age (NMPA) rises from 55 to 57. The change, effective April 6, 2028, applies to most private pensions, including workplace and personal schemes.
Who Is Affected?
The most impacted group includes people born between April 6, 1971, and April 5, 1973. These savers will turn 55 during the two-year window before the rule change. If they do not crystallise or access their pension before April 6, 2028, they may have to wait until age 57 to withdraw money without tax penalties.
Gary Smith, Partner in Financial Planning at Evelyn Partners, warned: “This seemingly straightforward rule change could catch out thousands of unsuspecting pension savers. Many face a cliff edge, where their ability to access their pension is suddenly put back for up to two years.”
Detailed Rules
- People born on or before April 5, 1971: Unaffected, can still access pensions at 55.
- People born between April 6, 1971, and April 5, 1973: May need to act before April 2028 to avoid delays.
- People born after April 5, 1973: Normally must wait until age 57.
The changes aim to reflect longer life expectancy and adjustments to the State Pension age. However, they could disrupt retirement plans for those intending to retire at 55 or use pension withdrawals to bridge the gap before State Pension age.
Potential Impacts
Evelyn Partners noted that affected savers may need to rely on ISAs, savings, or investments to cover living costs if pension access is delayed. Additionally, from April 2026, unused money in defined contribution pensions is expected to become subject to inheritance tax rules, adding further complexity.
Smith added: “Some retirees look to take withdrawals from their pensions using flexible options over several years because of the tax advantages this can offer. However, after April 2028 some people could find they are unable to access additional pension funds until they turn 57.”
Protected Pension Ages
Some pension schemes may offer a protected pension age allowing earlier access, but savers could lose these protections if they transfer pensions without taking advice. The armed forces, police, and firefighters pension schemes are not affected, as they have separate arrangements.
More information about pension access ages and retirement planning is available on the GOV.UK website.
