Three-word pension phrase could leave people waiting extra two years for cash

A little-known pension phrase could leave you waiting extra two years for cash. The Normal Minimum Pension Age (NMPA) is currently 55, but is due to rise to 57 from April 6 2028, with a little-known phrase buried in documents determining whether you're impacted.

The normal minimum pension age (NMPA) is the earliest age most people can start withdrawing money from their personal and workplace pensions. It's currently 55 years but this will increase to 57 from 6 April 2028, unless you have a "Protected Pension Age" or you're retiring due to ill health.

In PPA schemes, your pension will have the age of 55 specifically stated in your agreement, rather than the "NMPA". It means that you will still be able to start drawing it from the age of 55, even after April 6 2028.

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But many savers may not realise that transferring from a pension scheme with a protected pension age to a new scheme could leave them at risk of losing this benefit for good. Becky O'Connor, director of public affairs at PensionBee, explained: "Policies which were meant to be based on an access age of the NMPA had age 55 written in the policy terms instead.

"So, when the planned rise in the NMPA was announced, it transpired that some plans wouldn't be able to increase the access age for some of their plans, because of the way the conditions were worded." Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said the increase in NMPA "brings complexity in an area where people need certainty."

"People with several different pensions may find they can access some at 57 and others at 55 and this can undermine their plans if they are taken unawares," she said. "They may have planned to go part-time, or even retire at 55 - having to work a further two years would be a bitter blow.

"Others may have had plans to use their tax-free cash for a specific purpose at age 55 and now find these plans have to be shelved."