The normal minimum pension age rules from HMRC have created a potential confusing gap for those born between 6 April 1971 and 5 April 1973.
Under the former rules, these workers would have been able to access their pension at 55, but those who have not taken their pension benefits before April 2028 may need to wait for an additional two years under the new rules.
The new rules have been put into place as part of the upcoming changes to the normal pension age, which is due to rise from 55 to 57 in April 2028.
Adam Cole, retirement specialist at Quilter, said the new rules could lead to those born between these dates needing to change their financial plans.
He said: “The group that needs to pay closest attention are those born between 6 April 1971 and 5 April 1973. Under the old rules, they would have expected to access their pension at 55, but if they have not taken benefits before April 2028, they may need to wait up to two additional years. For anyone planning to use pension withdrawals to bridge the gap between work and later retirement, that makes timing and forward planning far more important.”
Andrew Tully, technical director at Nucleus, said that the new rules bring much needed clarification.
He said: "Allowing people who have already started to take benefits to continue to do so makes sense. However, many people gradually phase benefits, and this will mean that process will have to be paused and no further benefits can be crystallised until the individual reaches age 57, creating planning issues for some people.
"While many people won’t want to access their pension until a later age, some may be tempted to crystallise all benefits before April 2028 to allow the flexibility to take income as and when they need. Hopefully HMRC will consider further flexibility as part of its forthcoming consultation."
The changes were published in HMRC’s latest newsletter along with data on pension flexibility statistics.
The data shows that between January and March almost 14,000 people had to reclaim tax after accessing their pension flexibly, with over £44.1m repaid in these three months.
The number of reclaim forms submitted to HMRC fell by 9% year-on-year.
The average repayment rose to £3,160, a 10% rise year-on-year.