Pension freedom age rises to 57 for tax free withdrawals
The government has confirmed that it will proceed with plans to increase the normal minimum pension age (NMPA) from 55 to 57 years, marking the age they can access their pension pots tax free
What is normal minimum pension age?
The NMPA is the minimum age at which most pension savers can access their pensions without incurring an unauthorised payments tax charge. It is going to rise to age 57 in 2028.
When will government introduce the new minimum pension age bill?
The change to the rules will be introduced in Finance Bill 2021-22 and the draft legislation will introduce a window so that individuals have an opportunity to join a pension scheme by 5 April 2023 where the scheme rules on 11 February 2021 already confer an unqualified right to take pension benefits below age 57.
The government also proposes certain adjustments to the transfer rules to allow members to keep their protected pension age (PPA) after transferring their pension to another provider via block and individual transfers.
There will be consultation on the draft legislation before it is introduced.
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