The normal minimum pension age is changing - implications and planning

The normal minimum pension age (NMPA) is the earliest age at which someone can take benefits from a registered pension scheme without suffering adverse income tax charges under the unauthorised payment rules. The NMPA is set to increase from 55 to 57 from 6 April 2028.

HMRC has outlined their view on these new rules in PSO Newsletter 180 released in April 2026.

Two sets of pension members aged 55 or 56 will be affected - those who are currently drawing benefits and those who are intending to take pension benefits over the next 2 years.

Benefits in payment

There will be cases where someone aged 55 or 56 has started to draw retirement benefits before 6 April 2028 but does not reach age 57 until after this date. Technically, these payments will be unauthorised payments but, to prevent this happening, there will be transitional provisions for those who attain age 55 before 6 April 2028.

These transitional rules apply to defined benefit and defined contribution schemes and are subject to any specific provisions in the Scheme Rules, for example, in relation to early retirement due to ill health. Also, members with “protected” pension ages under age 57 (e.g. members of the police and armed forces and professional sportspersons) will not be affected.

The precise application of the transitional rules depends on the specific type of scheme benefit:

Pension payments

Where a member is aged 55 or 56 on 5 April 2028 and has already taken steps to access their pension benefits (such as designating funds to drawdown, purchasing an annuity or becoming entitled to a scheme pension), those payments can continue after 5 April 2028 and not be taxed as unauthorised payments. In effect, the transitional provisions will treat the member as having reached age 57 immediately before the first payment made after 5 April 2028.

This means that, if pension payments actually commenced before 6 April 2028 whilst the member was aged 55 or 56, they can continue after 5 April 2028 without being taxed as unauthorised payments.

If a member has designated funds to drawdown, aged 55 or 56 and before 6 April 2028, but does not actually start to draw benefits until after 5 April 2028, payments made after 5 April 2028 will not be taxed as unauthorised payments.

The same principle will apply where a member aged 55 or 56 becomes entitled to a scheme pension or lifetime annuity before 6 April 2028 but the pension or annuity payment is not made until after that date.

The key question is whether the member is entitled to the pension benefits before the change to NMPA on 6 April 2028. To be entitled, they must have done all they need to do to enable benefits to be paid. If this condition is satisfied, it does not matter if benefits are first taken after 5 April 2028. A mere intention to take benefits (perhaps evidenced by a request for a quotation) will not be enough.

Pension commencement lump sum (tax-free cash)

If a member aged 55 or 56 becomes entitled to a pension commencement lump sum (PCLS) before 6 April 2028 but payment is not made until after 5 April 2028, the transitional rules will treat it as if the member was aged 57 immediately before the payment was made, meaning it will be an authorised payment.

Uncrystallised Funds Pension Lump Sums (UFPLS) or phased retirement benefits

Because UFPLS and phasing involves a series of crystallisations, each benefit crystallisation will need to be tested against the NMPA rules when made. So, a UFPLS payment made by a 55- or 56-year old is permitted before 6 April 2028 but not after 5 April 2028.

Transfers and overseas schemes

Where a transfer is made to another scheme, broadly, the new transitional rules will apply to test the benefits paid under the new scheme as if they were still paid under the original scheme (see PTM104000, PTM105000 and PTM107000).

PTM113210 provides guidance on how these new rules apply to members of QROPS.

Planning

So what are the important planning points in the run up to 6 April 2028?

• If someone will be aged 55 or 56 on 6 April 2028 and they wish to draw their pension (or lump sum cash) benefits after 5 April 2028, whilst still aged under 57, they will need to have taken all possible action to demonstrate that they are entitled to those benefits.
  
  Where an entitlement does exist, the legislation will treat someone aged under 57 who takes benefits after 5 April 2028 as if they were then aged 57.
  
  A mere intention to take benefits will not be enough. Whether the member is “entitled” may vary depending on the requirements of the Scheme Rules. So, this aspect needs to be carefully checked with the pension provider.
   
• It is important to note that the transitional rules only protect benefits that have already been crystallised. From 6 April 2028, new crystallisations will not be allowed unless the member is aged at least 57. 
  
  So, someone currently drawing phased benefits or taking UFPLS payments and who will still be aged under 57 after 5 April 2028, will be affected.
  
  Such pension members will need to temporarily delay any crystallisations after 5 April 2028 until they attain age 57 to avoid unauthorised payment charges. If this has a negative impact on their finances, they could increase withdrawals before 6 April 2028 or use other capital before attaining age 57 to deal with any shortfall.

As the new pension and inheritance tax rules come into effect on 6 April 2027, many will be considering drawing benefits to make gifts to the next generation. Those who will be aged below 57 on 6 April 2028 should be careful to take account of these

If you or someone you know would like some guidance in this area, get in touch and arrange a free initial consultation.

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This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.

The information in this article is based on current laws and regulations which are subject to change as at future legislations.

A pension is a long-term investment. The value of an investment and the income from it could go down as well as up.  The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.

The Financial Conduct Authority (FCA) does not regulate tax advice.

The information in this article is correct as at 24/06/2026.