Nasty shock locked out of pensions

Rule changes mean many people face a longer wait to access cash, says GRAHAM HISCOTT, BUSINESS AND CONSUMER EDITOR

- GRAHAM HISCOTT, BUSINESS AND CONSUMER EDITOR

Millions of people born in the early 1970s face having to wait an extra two years to access their private pension.

The earliest you can take money from your defined contribution pension is usually at the age of 55. This is called the normal minimum pension age (NMPA). But from April 6, 2028, the NMPA will rise to age 57. It means that, if you are 55 or 56 when this happens, you might have to wait up to two more years. The move impacts pension savers born between April 6, 1971 and April 5, 1973.

According to the pensions app PensionBee, there is a small window for those people. They have from when they turn 55 to April 2028 to be able to access their pension, such as taking out one or more lump sums. The first 25% is tax free, up to a lump sum allowance of £268,275.