The Government this week decided to drop a plan which would have allowed people in some circumstances to continue to take their pension earlier.

The Finance Bill published this week will push up the Normal Minimum Pension Age (NMPA) from 55 to 57 in 2028.

The move will mean that, in general, people will not be able to exercise their Pension Freedoms rights until age 57 after 2028. Since 2015 access has been allowed after age 55.

The Government had initially proposed a protection regime which would have enabled people to keep an NMPA of 55 if they had transferred to a qualifying scheme by April 2023.

However, the move caused some experts to question the wisdom of the move and they warned it could lead to scammers targeting pension savers to make use of the loophole. 

Under a revised provision the deadline has been moved back to 4 November 2021 which will effectively end the early pension access route.

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said the Government’s move has closed down a risky for pension savers.

She said: “The announcement that the transfer window for people to keep a NMPA of 55 has effectively closed means the government has listened to industry concerns and blocked off one avenue for scammers who would have used the initial April 2023 deadline to exploit savers.

“There were also concerns people might be induced to transfer purely to keep a protected age of 55 rather than it being in their overall best interests, so the move is good news.”

Andrew Tully, technical director at Canada Life, said: “This is a sensible move by Government which will help reduce the risks for clients. There was a real concern people would look to transfer between now and 2023 based on access at 55 rather than wider aspects such as charges, flexibility or service. It should also reduce the ability for scammers to prey on client uncertainty. 

“Despite this the overall move to age 57 is still more complex than it needs to be. The NMPA should either be moved to 57 for all, with very limited exceptions, or the Government should retain age 55 and re-think its entire policy around minimum pension ages. We still have time to pause at this point rather than rushing forward with legislation.”