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The minimum pension age is changing

07 June, 2023

We are getting in touch to let you know about a legislation change that will impact our clients as well as the wider community

The government is increasing the minimum pension age from 55 to 57. This change will be taking place on the 6th April 2028.

What is minimum pension age (MPA)?

The minimum pension age (MPA) refers to the earliest age at which an individual can access their pension funds without incurring substantial tax penalties. Traditionally set at 55, the MPA acts as a threshold for individuals to commence drawing benefits from their pension schemes, providing them with greater flexibility in planning their retirement.

Reasons behind the change:

The decision to raise the minimum pension age is driven by several factors. Firstly, increasing life expectancies and improving overall health have led to longer retirements. The change in minimum pension age aims to align with these shifting demographics and encourage individuals to save adequately for their extended retirement years.

Furthermore, the change is intended to support the sustainability of pension schemes. By delaying access to pensions, individuals will have more time to accumulate savings, ensuring a better financial foundation for their retirement. This adjustment seeks to address potential shortfalls in pension funds and ensure the long-term viability of retirement systems.

To conclude:

As an accounting firm, we understand the importance of staying informed about these changes and supporting our clients through the transition. By reviewing your retirement goals, increasing contributions, seeking professional advice, and exploring alternative income sources, you can navigate these adjustments with confidence and maintain financial security throughout your retirement years.

Remember, it is crucial to consult with a financial professional to obtain personalized advice tailored to your unique circumstances. Together, we can adapt to these changes and build a brighter financial future.