Protected pension ages, including the increase to 57 in 2028

Protected pension age of under 55 (2010 protection)

Before 6 April 2006 (A-day) some individuals had a right to take their pension benefits before the normal minimum pension age if they either had a protected pension age, or they were retiring due to ill-health.

An individual with a protected pension age of less than 50, taking their pension before they reach the normal minimum pension age, may have their lump sum and lump sum and death benefit allowance reduced. More information can be found in HMRC's Pensions Tax Manual - PTM062220 - Member benefits: pensions: protected pension age: personal pensions and RACs - right to take benefits before age 50 and PTM062210 - Member benefits: pensions: protected pension age: occupational and public service schemes - right to take benefits before age 55

Individuals with an existing 6 April 2006 protected pension age of 55 or lower when the minimum pension age increases to 57 in 2028 will not be affected by this increase.

Who might have a protected pension age of less than 55?

• Members of an occupational pension scheme or Section 32 who, on 5 April 2006, had an ‘unqualified right’ to take their pension benefits before age 55.
• Individuals who, on 5 April 2006, were in certain jobs (usually sports people or those in dangerous occupations).

When can the protected pension age of under 55 be lost?

A protected pension age is lost if:

• The individual chooses to transfer their benefits to another pension scheme unless it’s a block (or buddy) transfer or part of a wind-up.
• The individual doesn’t become entitled to all the rights under the scheme on the same day. More information can be found in HMRC’s Pensions Tax Manual - PTM062220 Member benefits: pensions: protected pension age: personal pensions and RACs - right to take benefits before age 50.
• The individual is employed by certain persons after they have taken their benefits. More information can be found in HMRC's Pensions Tax Manual - PTM062230 Member benefits: pensions: protected pension age: loss of a protected pension age due to employment

What do we mean by ‘unqualified right’?

It means no one else needs to agree to the individual’s request to take their pension benefits such as an employer or scheme trustee. More details can be found in HMRC's Pensions Tax Manual - PTM062210 Member benefits: pensions: protected pension age: occupational and public service schemes - right to take benefits before age 55

Protected pension age of 55 or 56 from 6 April 2028 (protection 2028)

The normal minimum pension age is increasing for most people on 6 April 2028 to age 57. This change affects people born after 6 April 1971.

Some people have a protected pension age in their pension scheme, which is the right to take benefits before age 57. People don’t need to register this right with HMRC.

Who might have a protected pension age of 55 or 56?

A protected pension age applies at scheme level so an individual may have a protected pension age under one scheme, but not under another.

They will have a protected pension age under a scheme if:

• before 4 November 2021 they had the right to take benefits before they reached age 57
• that right was unqualified
• on 11 February 2021 the scheme rules included provision to pay benefits before age 57
• they were in the process of a substantive transfer to a scheme before 4 November 2021

Are there any exemptions to the increase of minimum pension age to 57?

Yes, there are. Members of uniformed service pension schemes are not affected by the increase. This includes:

• the naval, military or air forces of the Crown (including members of any reserve force)
• a police force other than the Civil Nuclear Constabulary
• firefighters

Can someone with a protected pension age of under 57 transfer their benefits?

Individuals who have an unqualified right to take their benefits before age 57 can transfer their benefits now and maintain that right in their new plan. There are 2 ways of doing this:

• they can do it as part of a block transfer
• they can do it as part of an individual transfer

Block and wind-up transfers

A block transfer, sometimes referred to as a ‘buddy transfer’ is a transfer of the pension rights relating to the individual and at least one other pension scheme member and, if certain conditions are met, allows an individual to keep their protected pensions age.

What are the before age 55 block or wind-up transfer conditions?

Block transfer

• More than one member of the scheme must transfer at the same time to the same scheme. A transfer to or from a Section 32 plan doesn't meet this condition as you can't have more than one member of a Section 32 plan. A group personal pension, personal pension, stakeholder pension or an occupational pension scheme under the same trust will usually meet this condition.
• 'Same time' doesn't mean funds have to transfer on the same day. As long as it’s obvious the transfers are meant to be part of the same transaction, that’s OK.
• The individual must not have been a member of the receiving scheme for longer than 12 months unless that scheme is a personal pension (including a stakeholder pension) that has only contracted out rights and they were a member on 6 April 2006.

Wind-up transfer

A wind-up transfer is a specific type of transfer. For a transfer to be treated as a winding-up transfer several conditions must apply:

• the individual has protected pension age, and
• the existing scheme must be winding up, and
• the receiving scheme must be a deferred annuity contract, usually a Section 32 plan

If the above conditions are met, the new pension plan will keep any protected pension age. 

What are the age 55/56 block transfer conditions?

Any rights to take benefits from 55 can also be protected on transfer if it is part of a block transfer. Unfortunately, the block transfer conditions for age 55 protection are slightly different to the earlier block transfer conditions.

For those protecting a right to a minimum pension age of 55, a block transfer needs to meet the following conditions:

• More than one member of the scheme must transfer at the same time to the same scheme.
• 'Same time' doesn't mean funds have to transfer on the same day, as long as the transfers are obviously meant to be part of the same transaction.

In other words, the conditions are the same as the original block transfer conditions except:

• the individual can have been a member of the receiving scheme for any amount of time, and
• they don’t have to take all their benefits in the receiving scheme at the same time.

The requirement for them to have unqualified right under the scheme rules also remains. However, this time it had to be in the scheme rules on 11 February 2021. This is the date the consultation paper on the increase to a normal minimum pension age of 57 was first published.

If their pension savings are block transferred, this means the right to take benefits from age 55 is also transferred to the receiving scheme. However, this only applies if the individual had the right to an age 55 normal minimum pension age before 4 November 2021.

Individual transfers

It’s also possible to preserve an age 55 normal minimum pension age when an individual transfers on their own and not as part of a block transfer. But these benefits need to be ringfenced and the protection only applies to the benefits from that transfer. This means any benefits resulting from further transfers received or contributions paid after the transfer will not benefit from the protected pension age of 55.

Transfers to a scheme that already has a protected pension age

An individual can transfer to a scheme where they already have a protected pension age of 55 or 56. Whether they benefit from the protected pension age will depend on how the plan was set up.

If the plan had been set up with an individual transfer, the protected pension age only applies to those transferred rights and subsequent transfers in won’t benefit from the protected pension age. 

¹ Although it's unlikely, it is possible the protected pension age in the original scheme was 56, if so the protected pension age in the new scheme will be 56.

Things to bear in mind

As well as all the conditions explained above, the receiving scheme/insurer must be willing and able to accept the transfer.

What do we still not know about the change in normal minimum pension age to 57?

The government acknowledges the importance of establishing a clear position on the transitional arrangements. For example, people who have taken benefits at age 55 but who have not reached age 57 by 6 April 2028.