RPSM08100030 - Technical Pages: Pension age: Phasing in of age 55 by 2010

Phasing in of age 55 by 2010

All registered pension schemes must incorporate the normal minimum pension age of 55 into their rules by 6 April 2010. It is for schemes/employers to decide how and when to make this change in a way that best suits their needs. If schemes do not adopt a normal minimum pension age of 55 by 6 April 2010 and pay benefits out before that age, then they will be making an unauthorised member payment with consequential tax implications.

Where a member starts to be paid benefits after reaching the normal minimum pension age of 50 before 6 April 2010 but they are not yet age 55 by 6 April 2010 those benefits can still continue to be paid as authorised payments. If the member wishes to crystallise further benefits after 5 April 2010, to be authorised payments the member must have reached the normal minimum pension age of 55.

Where a member aged 50 to 54 (inclusive) became entitled to a scheme pension, annuity (short-term or lifetime) or income drawdown before 6 April 2010 and the first payment of the pension is made on or after 6 April 2010 the member is treated as being normal minimum pension age of 55 so the pension payments are authorised payments.

Where a member aged 50 to 54 (inclusive) had funds in an unsecured pension fund before 6 April 2010 and the funds are used to purchase a scheme pension or annuity (short-term or lifetime) on or after 6 April 2010 the member is treated as being normal minimum pension age of 55 so the pension payments are authorised payments.

Where a member aged 50 to 54 (inclusive) became entitled to a pension commencement lump sum before 6 April 2010 and payment is made on or after 6 April 2010 the member is treated as being normal minimum pension age of 55 so the payment is an authorised payment.

Protection for the rights of certain members on 5 April 2006 to take pension benefits before age 55 or 50 may be given in particular circumstances. These circumstances can be found in RPSM03106000.