As of the 6th of April 2010 all new and existing pension schemes must change the minimum retirement age from 50 to 55. This change will affect all members in all types of pension scheme, unless they have a protected retirement age. However anyone who has started drawing their pension before the 6th of April 2010 and is still under the age of 55 will be allowed to continue to do so. However they will have to wait until the age of 55 to draw a pension from another plan. This rule will not be a problem for those who have brought together all their pension plans via a sipp.

Protected lower retirement age

If your part of an employers pension scheme, then it has to have been written in the rules before the 6th of December 2003 that you have the unqualified right to draw your pension below the age of 55. To have an unqualified right is the right to apply to start drawing benefits without first having to gain consent from your employer or trustee. However in order to exercise this right certain regulations must be adhered to:

• The full pension must be drawn
• You must leave employment and not return to connected employment.
• All protection is lost if you have voluntarily transferred your pension scheme after the 5th of April 2006

However different rules do apply to personal pension plans, including sipps. These plans can retain a retirement age lower than 50 if the holder qualifies for “special occupations”. Some of those in the pubic sector may also be able to retain the right to draw their pension before the age of 55, including those in the armed forces. Early retirement due to ill health will also still be an available option.

The one downside for sipp holders who are able to draw their pension before the 6th of April 2010 is that the full pension fund will have to be drawn. This will rule out the option of using your sipp for income draw down and the fund will probably have to be used to purchase an annuity. On the plus side however, those who have transferred all of their pension schemes into a sipp will have access to the full fund rather than just being able to draw on one fund at a time. Contact us today for a full, expert review of you finances from one of our partnered independent case managers.