Minimum Pension Age Change - Act Now
Mon 15th Feb 2010
John Bedford - Financial Services Director
If you answer YES to either of the following questions the change will apply to you:
- Were you born after 6th April 1955?
- Do you have a pension plan with a retirement age of less than 50?
Questions and Answers
Q1. I was born after 6th April 1995. If I have not started to take my pension by 6th April 2010 how will the change affect me?
A1. You will not be able to start to draw pension benefits until age 55. The longest that people will have to wait is 5 years, for some it will be shorter. The following table illustrates this:
|
Date of Birth
|
Minimum Pension Age
|
Date
|
Waiting
|
|
7th April 1955
|
55
|
7th April 2010
|
1 day
|
|
6th April 1956
|
55
|
6th April 2010
|
1 year
|
|
6th April 1958
|
55
|
6th April 2013
|
3 years
|
|
5th April 1960
|
55
|
5th April 2015
|
5 years
|
Q2. I was born after 6th April 1955 and currently receive a pension. Will my pension stop from 6th April 2010 and restart once I attain age 55.
A2. No. Pensions that start before 6th April 2010 will continue to be paid.
Q3. I have taken my pension commencement lump sum but not taken any pension. This was done by setting the income level to zero. Can I start to take a pension?
A3. Yes, benefits have started and you can take a pension within the minimum and maximum limits that have been set.
Q4. I started my pension at age 50 and will not be age 55 until after 6th April 2010. I am phasing my benefits, how will the change affect me?
A4. Your pension that you receive will continue to be paid. However from April 6th 2010 you will not be able to take any further Pension Commencement Lump Sum or pension fund from your uncrystallised fund until you reach age 55.
Q5. I am under age 55 and I have taken benefits from all my pension plans. I do not have any pension plans left to take benefit from. How will the change affect me?
A5. You will not be affected by the change as all of your pensions are in payment.
Q6. I have a special retirement age of 35, so how does the change affect me?
A6. You will still be able to take your benefits from age 35. However, the lifetime allowance that benefits are tested against will continue to be reduced by 2.5% for each year that they are taken before the normal minimum pension age. Currently (pre 6th April 2010) the maximum reduction is 35% as the normal minimum pension age is 50. The maximum reduction will be 47.5% from 6th April 2010. *
Q7. Will this change also apply to my State Pension?
A8. No. State Pensions have their own legislation. There is an increase in the State Pension Age taking place from 6th April 2010 to equalise female and male retirement ages. In addition State Pension Ages are being increased.
* For a full list of the occupations that the special retirement age applies to please visit HMRC’s Registered Pension Schemes manual at page 03106035. There are certain occupations where the benefits can be taken before the normal minimum pension age and the reduced standard lifetime allowance does not apply. These are listed at page 03106050.
If you would like to find out more please contact us by phone on 02890 329042 or leave us a message.