The 2028 pension age bombshell set to hit millions – and how to navigate it (Image: EXPRESS)
Make a note in your calendar – the goalposts for your retirement could be set to move again. After five years of back-and-forth, the tax office has shared its proposals for what the new Normal Minimum Pension Age (NMPA) rules could mean for your retirement timeline when they take effect in two years’ time.
From April 6, 2028, the NMPA – the earliest age you can legally access your pension without a tax penalty – will jump from 55 to 57. While life expectancy is rising, this two-year delay will be a blow to anyone hoping to hang up their boots early, and the impact depends entirely on the date you were born. Under proposals published in HMRC’s latest newsletter, those born before April 6, 1971, will still be able to access their money at 55. If you were born on or after April 6, 1973, you are locked out until you reach 57.
Then there is the “middle group” born between April 1971 and April 1973. If you start a drawdown before the 2028 deadline, you can continue to access that specific taxable pot. However, you will not be able to move any new money into a drawdown or start a new annuity until you reach 57.
The delay will come as a blow to anyone hoping to hang up their boots early (Image: Getty)
Proposals are still up for consultation, but they’ve given us a good idea of what’s to come. For those it may affect, the looming deadline might tempt a quick cash grab – but don’t be too hasty. Calculations from wealth management firm AJ Bell highlight the benefit of a “phased” approach. Take a £100,000 pension, you could claim the full £25,000 tax-free lump sum (25%) today, but that would close the tax-free door on that pot.
However, if you only take £5,000 tax-free now and shift £15,000 into a drawdown, you leave £80,000 invested. If that remaining capital grows, your remaining 25% entitlement grows with it, meaning your total tax-free haul could eventually be much higher than £25,000.
The takeaway is not to let a change in rules dictate a change in lifestyle without doing the maths first.
So if you’re approaching your mid-fifties, now could be the time to sit down with your latest pension statement and a calculator. Mapping out a phased withdrawal may feel like a lot of work, but your future self might thank you for it. If you need help with planning, independent financial advisors (IFAs) can be found on unbiased.co.uk.
DEAL OF THE WEEK
If you say “I’m home” at the bar of a Greene King pub, you’ll get a free pint (or soft drink) on Bank Holiday Monday. Find your nearest participating local at greeneking.co.uk/we-pour
Bag business class flight seats for fraction of price
The months have flown by this year, and I can’t quite believe we’re approaching the summer holiday season. If you have any – hopefully undisrupted – flights booked in, did you know you can “bid” for a ticket upgrade with certain airlines? This means you could bag a business or first-class seat for significantly less than the sticker price.
Taking Virgin Atlantic, you can submit bids up to two days before departure. These are then assessed based on factors such as availability, passenger count, and the value of the bid. To qualify, you should already hold a valid ticket for the flight and be bidding for the next cabin up, such as Premium or Upper Class. If you’re travelling in a group with this airline, bids must be placed for all passengers on the booking, priced per person.
Successful upgrades will come with all of the benefits of the new cabin. For example, increased baggage allowance, extra leg room, free amenity kits, and free snacks and meals, or access to the Virgin Atlantic Clubhouse if you win an Upper Class ticket. Visit Virgin Atlantic’s ‘Bid for an Upgrade’ page on its website to get started.
Etihad Airways also offers the perk, and so does British Airways. With BA, you can cut it fine and bid for an upgrade up to six hours and 30 minutes before departure. You can upgrade to any higher cabin, but your luggage allowance will remain the same as on your original ticket with this airline. However, similar to Virgin Atlantic’s terms, you must offer to upgrade everyone on your booking. Check if your British Airways flight is eligible for an upgrade via its Plusgrade website – just enter your name and booking reference.
Usually, airlines set a minimum bid that most passengers would probably go for, so bidding around 20% to 30% above that could boost your chances. Like with all bidding events, you’re not guaranteed to win, but if you can bag a heavy discount on a business class flight, it could be worth a go.
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