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On the 17th January 2022, HMRC published their pensions schemes Newsletter 136. 

Whilst most of the update relates to scheme administrators, of interest to pension members will be the section referring to the Normal Minimum Pension Age (NMPA) that is increasing from age 55, to age 57 on the 6th April 2028. 

 Point 2 

  • NMPA - No change here. As we reported in our Pensions update 247, the increase is to go ahead. 
  • • The removal of what was to be a transfer ‘window’ stands, with only transfers underway before the 4th November 2021 being protected. 

Point 2.1 

  • Unqualified right at age 50 - In a nutshell, if a policyholder needs to seek consent, this is not an unqualified right to take benefits early. 

Point 2.2 

  • Joining a protected scheme - To benefit from the 2028 protection framework, an individual should have joined, or have made a substantive request to join, a scheme offering an unqualified right to a protected pension age of less than 57, on or before 4 November 2021 
  • • The provisions in the 2028 protected pension age do not apply to other previous protection regimes. The Finance Act 2004 will continue to apply. 
  • • This includes members with pre A-day protections or protections following the previous increase in NMPA in 2010. 

Point 2.3 

  • • Block transfers – still deemed as two or more lives as the present legislation reads. 
  • • However, unlike earlier block transfer rules, it does not matter if the member has already been a member of the pension scheme to which the block transfer is made before the date of the transfer ― the 12-month ‘permitted membership period’ is not a requirement 
  • • The 2028 protected pension age would not apply to other sums or assets already held in the receiving scheme, or that are subsequently put into the scheme either by pension contribution or transfer. The aim is to protect the transferred pension rights, not enhance them. 
  • • Ringfencing will have to apply. 

QROPS 

  • • If the individual has a 2028 protected pension age and there is a block or individual transfer, then an individual would take their protection with them to the QROPS. 
  • • However, if there was not a protected pension age previously, then payments before age 57 after 5 April 2028 will result in an unauthorised payment charge 

Point 2.4 

  • Transitional issues and hardwiring of age 55 - There may be transitional issues that arise for some members. For example, where the member does not have a protected pension age and they have reached age 55, but not age 57 by 6 April 2028. 
  • • Establishing a clear position with the provider as to what age is hardwired into the plan will be key.


FOR INVESTMENT ADVICE REGARDING YOUR PENSION OR OTHER INVESTMENTS PLEASE CONTACT Elliott Wilson ACSI DipPFS AF3

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