Millions face two-year wait if born between 2 years due to pension rule change | Personal Finance | Finance
Millions of pension savers born between April 6 1971 and April 5 1973 could face an unexpected two-year delay in accessing their retirement funds unless they act before April 6 2028, PensionBee has cautioned.
From April 6 2028, the Normal Minimum Pension Age (NMPA) – the earliest point at which most people can draw on their defined contribution pension – will rise from 55 to 57. This may include workplace and personal pension schemes.
Those born on or before April 5 1971 will remain unaffected, as they will have already turned 55 before this change comes into force. Meanwhile, individuals born after April 5 1973 will find the earliest date for claiming their pension benefits pushed back by two years.
However, there is a peculiar anomaly for those falling within the 1971 to 1973 bracket. If you turn 55 between April 6 2026 and April 5 2028, you will have a narrow window of opportunity to begin withdrawing from your pension. Should you miss this opportunity, you will be required to wait until your 57th birthday to access your savings.
Should savers within this age group fail to access or ‘crystallise’ their pension before April 6 2028, they may consequently have to wait until the age of 57 to draw on their retirement pot – potentially meaning a wait of nearly two additional years in some circumstances.
Maike Currie, vice president of personal finance at PensionBee, said: “For some savers this could come as a nasty shock. Many people simply assume they will be able to access their pension at 55, not realising the rules are changing.
“There is a very specific cohort – those born between April 1971 and April 1973 – who face a potential cliff edge. Miss the deadline to access your pension before April 2028 and you could find yourself locked out of your savings for up to two more years.
“That does not mean people should rush to raid their pension. In many cases, leaving savings invested for longer may lead to a healthier retirement pot thanks to a few additional years of extra contributions and investment growth.
“But it does mean people should start planning now. For anyone hoping to retire early, bridge a gap between work and retirement, or phase down working hours in their mid-50s, understanding these dates could be crucial.”
