We use cookies to allow us and selected partners to improve your experience and our advertising. By continuing to browse you consent to our use of cookies. You can understand more and change your cookies preferences here.


When you click on a retailer link on our site, we may earn affiliate commission to help fund our not-for-profit mission.Find out more.

5 Nov 2021

Pension age loophole closed to combat scammers

Savers are now unable to join schemes that allow pension access at 55 after 2028

The government has acted quickly to block a loophole that allowed savers to move their money into pension schemes permitting access to their private and some workplace pensions at age 55 after 2028.

Greater pensions flexibility introduced in April 2015 provided savers in defined contribution (DC) schemes earlier access to their cash, enabling flexible withdrawals from the age of 55. As anticipated, it was confirmed in September 2020 that the so-called Normal Minimum Pension Age (NMPA) would rise from 55 to 57.

However, it was proposed initially that if you join a pension scheme before 5 April 2023 that allows you access at 55, you'll be able to access the money at that age - even if you won't reach 55 until after 2028.

This window of opportunity has now been closed with the deadline moved back to 4 November 2021.

Be more money savvy

Get a firmer grip on your finances with the expert tips in our Money newsletter – it's free weekly.

This newsletter delivers free money-related content, along with other information about Which? Group products and services. Unsubscribe whenever you want. Your data will be processed in accordance with our Privacy policy

Change in date closes loophole

It was always anticipated that the NMPA would rise. This change is to reflect trends in longevity and encourage individuals to remain in work, while also helping to ensure pension savings provide for later life.

The uncertainty surrounded how long you'd be able to transfer money into pension schemes with age 55 still available as the NMPA.

The government has now included the increase in Normal Minimum Pension Age (NMPA) in the Finance Bill and stipulated that transfers to qualifying schemes could only take place until midnight on 3 November 2021.

A change in the date addressed industry concerns about increasing complexity in retirement planning, as well as protecting people vulnerable to scammers.

Vulnerable to pension scammers

One unintended consequence of the original date was that scammers were encouraged to attempt to persuade people to shift money now to beat the April 2023 deadline.

This might result in savers tempted by early access being pressurised into poor 'buy it now' decisions, with money moved into inappropriate investments or directly into the accounts of fraudsters.

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said of the shift of date: 'The announcement that the transfer window for people to keep a NMPA of 55 has effectively closed means the government has listened to industry concerns and blocked off one avenue for scammers who would have used the initial April 2023 deadline to exploit savers.

'However, we must still be aware that scammers are still likely to try and use the situation to their advantage.'

How do scheme rules work for early pension access?

Lots of people may already be in schemes where the rules specifically state that they can access their pension at 55. These people won't be impacted by the rule changes and won't need to take any action to access their scheme at this age.

Other workplace schemes may say that you can start using your savings in line with whatever age the government nominates, so the NMPA will move to 57.

If you reach 55 before April 2028, you'll still be able to access your DC pensions at that age.

People who have moved jobs in their working life will probably have multiple pots, which are likely to have different rules so you should check them all.

Should you unlock your pension early?

You'll need to decide if unlocking your pension at either 55 or 57 is a sensible move. It might be that you have to fund a 30-year retirement with your pension savings.

The current state pension age in the UK is 66. Those who want to retire earlier, say at 60, will probably need to tap into their private pensions before they get the state pension.

Ultimately, the longer you keep your pension invested and contribute to it, the more you'll have in your pot to retire. So, if you can continue working, it's well worth doing so you can enjoy the best retirement possible for you.

If you want to unlock your pension early, you'll need to know you can make the money last and not spend it all as soon as you get your hands on it.

How to plan for retirement

Financial preparation for retirement is really important - whatever age you intend to retire - to ensure you'll have enough money to last your entire lifetime and live comfortably.

Here are some key things to consider:

Get an estimate of how much you'll have: pension statements from your employer or provider are useful to indicate how much you'll get. You can also use our pension calculator to get an estimate of how much you'll have.

Check your state pension entitlement: a state pension forecast will help you to gauge how much you're on course to get from the government, which you can obtain from its website. Find out more in our guide how much state pension will I get?

Track your expenditure: this will give you a better idea of what you'll be likely to spend in retirement. We've put together a guide that highlights how much you could need in retirement based on three levels of spending - for essentials, a comfortable retirement, and a more luxurious lifestyle.