Normal Minimum Pension Age Transitional Provisions Regulations

HMRC is seeking views on draft regulations amending the Taxation of Pension Schemes (Transitional Provisions) Order 2006. The government recognises that some individuals who are aged 55 or 56 immediately before the normal minimum pension age (NMPA) increase may already have become entitled to pension benefits or may already have taken steps to access those benefits. Without further provision, payments made after 5 April 2028 could potentially fail to satisfy conditions linked to the NMPA, despite the member having satisfied the rules in force prior to the increase.

To address this issue, the draft regulations would provide that, in specified circumstances, members who were aged 55 or 56 on 5 April 2028 are treated as having reached age 57 immediately before certain pension payments are made. The changes are intended to ensure that specified pension income payments and lump sums made on or after 6 April 2028 continue to qualify as authorised payments for tax purposes where the relevant entitlement arose before the NMPA increase takes effect. The provisions cover certain pension income payments, stand-alone lump sums, pension commencement lump sums, pension commencement excess lump sums and trivial commutation lump sums. They also preserve access to subsequent trivial commutation lump sum payments where a qualifying payment was made before 6 April 2028.