People often underestimate how long they will live in retirement, and if they begin drawing their pensions too early, they could be left short down the line. Changes to the normal minimum pension age (NMPA) may help Britons to maintain the retirement lifestyle they expected.
Jeannie Boyle, Director & Chartered Financial Planner at EQ Investors, has provided Britons with the key information they need surrounding the NMPA:
What is the NMPA?
“The normal minimum pension age is the youngest age at which a member of a registered pension scheme can ordinarily expect to take/draw their pension benefits.
“The NMPA for taking benefits from a private pension was set at 50 when it was first introduced on April 6, 2006.
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“The change is intended to reflect longer life expectancy and the increase in the state pension age.”
The state pension age is currently 66 in the UK for men and women, but will increase to 67 in 2028 and again to 68 by 2046.
Not everyone will be impacted by the increased NMPA, with some groups of people being able to retain the previous, lower age.
Ms Boyle said: “There are exceptions for those who have a protected pension age or who take their pension due to serious ill-health.
“For a man, those figures are 84, 92 and 97.”
By that logic, Britons’ pension savings may need to sustain them for over 40 years.
Ms Boyle warned that taking money out of a pension before it is really needed puts far more pressure on the funds remaining.
She concluded: “Since the introduction of pension freedoms in 2015 around £45billion has been withdrawn from pensions.
“Some people are likely to find that they don’t have enough left to fund the retirement they expected.”