Pension age is changing – ‘Real risk’ HMRC will ‘clobber’ Britons with 55% charges


The NMPA changes were announced back in July, as plans were published which proposed an increase from age 55 to 57 to take effect on April 6, 2028. However, by trying to protect some Britons from the age rise, the Government may be adding to the confusion, it’s been suggested.

Tom Selby, head of retirement policy at AJ Bell has criticised the Treasury’s handling of the situation. He said: “The Treasury has taken what should have been a simple reform and turned it into a hot mess of complexity. In attempting to provide ‘protection’ for some people from the proposed rise in the minimum pension access age to 57, policymakers will cause outlandish confusion for savers.

“Everywhere you look there are holes and problems in these proposals. Perhaps most worrying is the risk that, by creating a two-tier pension access system, the Government will inadvertently open the door to scammers. It is not too late to avoid this madness and we strongly urge the Treasury to step back from the brink.


“Furthermore, there is an alternative way forward which achieves the policy intention and is unbelievably simple – do away with the proposed protection regime and move everyone to a ‘Normal Minimum Pension Age’ of 57 in April 2028.”

Andrew Tully, technical director at Canada Life echoed the sentiments of Mr Selby and shared his bewilderment at how the new policy is being implemented. He said: “What should have been a simple process has turned into a hugely complex mess. If the Government believes there are genuine reasons to increase the NMPA to age 57 then that should apply to most people, although there is an argument for an exception for ‘uniformed’ pension schemes. This draft legislation gives wider protection, and on a completely random basis rather than being targeted at a specific cohort or age group.”

One of the stranger elements of the protections included within the changes is that even children can take advantage of the ability to secure a NMPA age of 55.


Mr Tully explained: “We even have the bizarre scenario that a child could take out a pension before 2023 (in a suitable scheme) and protect the ability to take benefits at age 55 in the 2070s. That is nonsensical. The NMPA should either be moved to 57 for all, with very limited exceptions, or the Government should retain age 55 and re-think its entire policy around minimum pension ages.”

An HM Treasury spokesperson said: “We believe it’s right to protect pension savers whose scheme rules provide them with an unqualified legal right to take pension benefits before age 57. That is why earlier in the year we set out the details of the framework and have been consulting on the technicalities to ensure it is as simple and fair as possible.”

READ MORE: Pensioners to pay 12% National Insurance! New health and social care levy threat


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