Savers looking to transfer their pension have been offered the opportunity to avoid the normal minimum pension age increase in 2028 under new draft legislation proposed by HMRC.

The normal minimum pension age is set to increase to 57 from 55 in April 2028.

An earlier consultation response in February did not address how this would affect individual transfers, although it did state that block transfers should keep their protected pension age.

HMRC said its draft legislation will give savers the opportunity to join a pension scheme offering an unqualified right to take pension benefits below the age of 57 by 5 April 2023.

In its normal minimum pension age increase consultation response the Government provided the opportunity for savers to lock in their current minimum pension age at 55, so long as the scheme they are a member of has this written into its rules.

Members of the armed forces, police and firefighters will automatically have protected pension ages even if not stated by their scheme rules.

Andrew Tully, technical director at Canada Life, said the draft legislation adds further complexity to the pension system.

He said: “The confirmation of the timing of the increase in the normal minimum pension age will be welcome to individuals and advisers and give time for appropriate planning over the next seven years. However, what should have been a simple process has turned into a hugely complex mess.

“The process to decide which individuals retain a right to an earlier pension age is completely arbitrary, being based on the specific wording within scheme rules, which may have been written many years ago. It also leaves open the possibility that people will hunt around for a scheme which gives them the right to take benefits at age 55 and transfer to that before 2023. So expect frantic transfer activity over the next few years as people look to secure age 55 as their minimum pension age, irrespective of their birth date.”

However, Mr Tully also said that the legislation could lead to more pension savers seeking financial advice. He said: “The legislation as drafted adds further hideous complexity to the pension system, which might be fine for pension geeks like me but for the average pension saver will prove nigh on impossible to navigate successfully without the help of a professional adviser.”

The Government has been looking to increase the normal minimum pension age in response to increased longevity and to help stop pension savers running out of money in retirement.

Jon Greer, head of retirement policy at Quilter, questioned whether the increase in the normal minimum pension age is just going to add additional complexity for very little benefit.

He said: “The idea behind increasing the NMPA is to stop people running out of money. But looking at the data, most people taking their pension benefits ‘early’ just cash in their pot.

“According to the latest retirement income data from the FCA, 55% of pension plans accessed for the first time are withdrawn fully overall, with 75% of those withdrawals done by people aged 55-64. Adding an extra two years to the minimum age they can access their pension pot isn’t going to change behaviour and will do very little for improving retirement prosperity.”