Pension increase meaning

FORTHCOMING DEVELOPMENT: Section 10 of the Finance Act 2022 will raise the normal minimum pension age (NMPA) from 55 to 57 on 6 April 2028, except for members of the public service pension schemes for firefighters, police and the armed forces. The Finance Act 2022 will also permit members of registered pension schemes to take benefits before 57 if, on or before 4 November 2021, they met certain conditions: they already had an ‘unqualified right’ to take benefits; or they were in the course of a substantive transfer to a scheme providing an unqualified right to a protected pension age below 57 on or before that date. To rely on this new 2028 protection, the scheme’s rules must have included, as at 11 February 2021, an unqualified right to access scheme benefits before age 57. For further information, see Practice Note: Increasing the normal minimum pension age (NMPA) to 57—pensions impact...

Statutory minimum increase rates The summary below sets out the current statutory minimum uplift that occupational pension schemes must apply each year to each tranche of pension. Period of pensionable service to which the pension relates (or, for money purchase benefits, the period in which contributions were paid): Before 6 April 1997 — no statutory minimum increase. However, to refund surplus assets to a sponsoring employer under the Social Security Pensions Act 1975, s 58A, it was necessary (until 5 April 2006) to revalue all pensions in payment (excluding GMPs and money purchase benefits) annually in line with RPI, capped at 5%. Despite the absence of a statutory minimum, most defined benefit schemes provide some pre-1997 indexation under scheme rules or as a discretionary benefit. As at March 2023, research indicates that only 17% of members of private sector defined benefit schemes receive no pre-1997 indexation on benefits. There have been calls on the government to legislate to mandate inflation-linked increases to pensions...

PensionBee press release, 14 April 2025 In a release issued by PensionBee on 14 April 2025, the company reported that the total average pension contribution from its male customers climbed by £316 in 2024, compared with a £174 uplift in the average female contribution. Men’s average annual payments into retirement savings reached £1,662, which is 44% higher than the female average of £1,155. PensionBee said these figures represent a 'notable increase' on the 37% difference between male and female annual contributions recorded in 2023. Lisa Picardo, chief business officer at PensionBee, said the expanding gap between men’s and women’s retirement contributions is 'a serious concern'...

In this issue Employment taxes Budgets and Finance Bills VAT International Taxes management and litigation Companies and corporation tax Anti-avoidance Devolution Pensions LexTalk®Tax: a Lexis®Nexis community Daily and weekly news alerts New and updated content Dates for your diary Trackers Latest Q&A Useful information Employment taxes Royal Assent for National Insurance Contributions (Secondary Class 1 Contributions) Act 2025 The National Insurance Contributions (Secondary Class 1 Contributions) Bill—bringing in an uplift to 15% for the main rate of employers’ secondary Class 1 National Insurance contributions from 13.8%, and cutting the secondary threshold to £5,000 per annum—was first set out at Autumn Budget 2024 and obtained Royal Assent on 3 April 2025. The provisions apply from 6 April 2025. See: National Insurance Contributions (Secondary Class 1 Contributions) Act 2025. HMRC publishes Employment Related Securities Bulletin 59 (March 2025) Private Intermittent Securities and Capital Exchange System (PISCES)—policy...

In this issue: Wills Court of Protection UK taxes for Private Client HMRC Manuals updates Tax avoidance, evasion and non-compliance Budgets and Finance Bills Contentious trusts and estates Pensions, insurance and tax efficient investments International Question of the week Additional Private Client updates this week Daily and weekly news alerts LexTalk®Private Client: a Lexis+® community New and updated content Dates for your diary Trackers Useful information Wills Llamas, legacies, and legalities—does a gift in a Will fail if the charity ceases to exist? (British Camelids Ltd v Brooke Hospital for Animals) Animal-loving conservationist Candia Midworth, who kept llamas on her Surrey farm, directed that her £1.9m estate be shared equally among a number of animal charities. By the date of her death on 8 April 2022, some of those charities had either passed their functions to successor bodies or disappeared entirely. British Camelids Ltd, as claimants,...

FORTHCOMING CHANGE 1 : Section 10 of the Finance Act 2022 will raise the normal minimum pension age (NMPA) from 55 to 57 on 6 April 2028, except for members of the firefighters, police and armed forces public service pension schemes. This increase applies broadly across registered schemes, subject to the stated exemptions. The same Act will also permit members of registered pension schemes to access benefits before 57 where, on or before 4 November 2021, they either held an ‘unqualified right’ to draw benefits, or were already engaged in a substantive transfer to a scheme providing an unqualified right to a protected pension age below 57 on or before 4 November 2021. To rely on this new protection applying in 2028, the scheme’s rules must, as at 11 February 2021, have contained an unqualified right to take entitlement to scheme benefits before age 57. For more detail, see Practice Note: Increasing the normal minimum pension age (NMPA) to 57—pensions impact. FORTHCOMING CHANGE 2 : The Pension...

FORTHCOMING DEVELOPMENT : Section 10 of the Finance Act 2022 will increase the normal minimum pension age (NMPA) from 55 to 57 on 6 April 2028 (save for members of the firefighters, police and armed forces public service pension schemes). It will additionally grant members of registered pension schemes the ability to draw benefits before turning 57 where, on or before 4 November 2021, they already held an unqualified right to take benefits, or were progressing a substantive transfer to a scheme that, on or before 4 November 2021, provided an unqualified right to a protected pension age below 57. To rely on the new 2028 protection, the scheme’s rules must, on 11 February 2021, have contained an unqualified right to access benefits before age 57. For more detail, refer to Practice Note: Increasing the normal minimum pension age (NMPA) to 57—pensions impact. Beckmann liabilities relate to occupational pension benefits other than those concerning old age, invalidity or survivors. This protection applies only where the wording gave an unqualified...

FORTHCOMING DEVELOPMENT 1 : Under section 10 of the Finance Act 2022, the normal minimum pension age (NMPA) is scheduled to increase from 55 to 57 on 6 April 2028 (excluding members of the public service pension schemes for the firefighters, the police and the armed forces). The Act will also confer on members of registered pension schemes an explicit right to take benefits before age 57 where, on or before 4 November 2021, they either held an ‘unqualified right’ to take benefits, or were already in the process of a substantive transfer to a scheme offering an unqualified right to a protected pension age below 57 on or before 4 November 2021. To rely on this new 2028 protection, the relevant scheme’s rules must have included (on 11 February 2021) an unqualified right to take entitlement to scheme benefits before age 57. For further information, see Practice Note: Increasing the normal minimum pension age (NMPA) to 57—pensions impact. FORTHCOMING DEVELOPMENT 2 : On 22 November 2023,...

The Finance Act 2004 (FA 2004) sets conditions for pensions and lump sums to be authorised payments. Under FA 2004, a member’s pension from a registered pension scheme must not begin before they reach the normal minimum pension age, unless the ill-health condition is met. In the same way, most lump sums are not payable before that age. The normal minimum pension age was 50 when FA 2004 took effect on 6 April 2006, rose to 55 from 6 April 2010, and will increase to 57 from 6 April 2028, excluding uniformed services pension schemes (army, navy, air force, police and firefighters). Transitional provisions preserve members’ subsisting rights to draw scheme benefits before age 55; this is referred to as a protection pension age. The Pensions Tax Manual confirms that, to hold a protected pension age, the member must have an unqualified right to receive benefits before the normal minimum pension age, i.e. not dependent on another person’s consent (PTM062210)...