Retirement warning as Britons could be penalized when withdrawing their pension | Personal finance | Finance

People are not free to collect their pension whenever they want; restrictions are placed on when savers can access their funds. The minimum normal retirement age (NMPA) is the main instrument for moderating access to retirement.

What is the Minimum Normal Retirement Age (NMPA)?

The NMPA is the earliest age at which Britons can tap into their retirement fund.

It is in place to prevent people accessing their kitty too early and therefore running out of money in retirement.

Britons could face an unauthorized payment tax burden if they withdraw money from their pension before reaching their NMPA.

READ MORE: State pension warning: Britons urged to check their records to ensure they receive the full amount

However, changes are coming that will increase the NMPA.

In April 2028, the NMPA will drop from 55 to 57.

This means that people wishing to access their private pension will have to wait two more years.

The goal of the changes to the NMPA is to help ensure that people’s retirement savings are capable of supporting their entire retirement, which may be more difficult as life expectancies increase.

It will coincide with the next increase in the legal retirement age.

The statutory retirement age is expected to increase to 67 by April 2028.

The NMPA was first introduced in 2006 and set at 50 years.

It was later raised to 55 in 2010.

About Ian Crawford

Check Also

Retirement savings on PIP: How can I provide a pension for my daughter who is applying for a PIP | Personal finance | Finance

“I have a 40 year old daughter who is autistic (high scale) currently on PIP. …