Background

On 6 August 2026, HMRC published for technical consultation draft secondary legislation to provide transitional tax protections in connection with the increase in the normal minimum pension age (“NMPA”) from age 55 to age 57 from 6 April 2028 (the “draft legislation”).

In this response

General comments

We welcome the opportunity to respond to this consultation. We have provided general comments and specific feedback on the draft legislation where we believe this could give rise to difficulties for our clients.

  1. Existing pensions in payment on 6 April 2028

Pension Schemes Newsletter 180 (April 2026) set out HMRC’s view that a pension already in payment as at 5 April 2028 can continue without interruption as an authorised payment if the member was above the existing NMPA of 55 when the first instalment was paid. This is because pension rule 1 under section 165 of the Finance Act 2004 (“FA04”) has already been satisfied. This is consistent with the guidance that was given in Pension Schemes Newsletter 44 (December 2010) in relation to the increase in NMPA to 55.

A large number of schemes are likely to have members in this category, so it will be important to ensure clarity across the industry. As this point is not addressed in the draft legislation, it would therefore be helpful if it could be reinforced in the PTM. Our concern is that guidance contained in newsletters becomes harder to access over the passage of time (for example, when newsletters are archived from HMRC’s website) and it perhaps carries less weight than statements of HMRC’s current position in its maintained guidance.

All members affected by this issue will reach the new NMPA of 57 by 6 April 2030. However, given this relates to the question of whether the benefit was an authorised payment or not, it would be helpful if the guidance could remain in place after this date.

  1. Other consequential amendments
    • Protected pension ages

We note that further updates to secondary legislation may be required to accommodate protected pension ages below age 57.[1] For example, in relation to deemed block transfer provisions on winding up, articles 14 and 16(2) of the Pension Schemes (Transfers, Reorganisations and Winding Up) (Transitional Provisions) Order 2006[2] refer to paragraph 22 of Schedule 36 FA04. Should these references be expanded to encompass later protected pension ages?

    • DWP pensions legislation

In addition to adjusting pensions tax legislation to take account of the rise in NMPA, consequential changes to DWP pensions legislation might also need to be considered. For example, as currently drafted, section 52 of the Pensions Act 1995 generally restricts the application of statutory minimum increases on pensions in payment where the member in question “has not attained the age of 55 at the time when the increase takes effect”. This provision seems to have been pitched at age 55 since its introduction in April 1997, so it is not necessarily tied directly to NMPA. However, it has historically been higher than or equal to NMPA.

Given the rise in NMPA to age 57 from April 2028, we assume there may be plans to revisit section 52 and, more generally, to check whether any other changes to DWP legislation might be warranted.

Comments on the draft legislation

  1. Scope of the transitional easement for lump sums

The draft legislation provides transitional protection where a member aged 55 or 56 has become entitled to certain lump sums before 6 April 2028 but payment is not made until on or after that date. We consider that this protection should be extended to all types of lump sums where the NMPA condition applies. This includes:

    • Small lump sums not exceeding £10,000 under regulations 11, 11A and 12 of the Registered Pension Schemes (Authorised Payments) Regulations 2009[3]

The transitional protection does not appear to apply to these lump sums, unlike trivial commutation lump sums under which are covered by draft Article 43D(3).

    • Authorised member surplus payments

Since the intention is to bring legislation providing for authorised member surplus payments into force on 6 April 2027, if the NMPA condition will apply to these lump sums as proposed, then they should also be covered by the transitional protection.[4]

    • Uncrystallised funds pension lump sums (“UFPLS”)

As with other lump sums, there is a risk that members may have fulfilled all conditions and taken all actions necessary to receive an UFPLS before 6 April 2028, but the payment is not made before that date. However, in contrast to most other lump sums where entitlement arises when the recipient acquires an actual right to it, entitlement to an UFPLS arises immediately before it is paid.[5] Therefore, there should currently be no opportunity for a “delay” between becoming entitled to an UFPLS and the UFPLS being paid. We understand that the rationale for this difference in treatment is based on the way the lifetime allowance operated before 6 April 2024.[6]

Given the LTA’s abolition, and assuming there are no other reasons why a difference in treatment might be warranted, is there any intention to amend the primary legislation so as to bring the meaning of “becomes entitled” for UFPLSs into line with other lump sums under section 166(2)(b) of the FA04? If so, the draft legislation should likewise include transitional provisions to cater for an UFPLS.

If no changes are planned, we are concerned that the difference in treatment of UFPLSs could give rise to confusion in practice. In addition, this risks benefits where an actual entitlement to an UFPLS has arisen for all other intents and purposes falling the wrong side of the NMPA dividing line. Will suitable warnings be included in the PTM to raise awareness and help give members and schemes an opportunity to take action, where possible, to avoid members aged 55 or 56 at 6 April 2028 losing their entitlement to an UFPLS because of delays to or errors in payment outside of their control?

  1. Terminology for members aged 55 or 56

We are concerned that the phrase “the member was aged between 55 and 56 (inclusive)” used throughout the draft legislation may be unclear. It could be interpreted as excluding members after their 56th birthday, eg members aged 56 and one day.

In a different context, we note that the definition of “age” in section 181(1)(b) of the Pension Schemes Act 1993 provides that a person is “between two particular ages if he has attained the first but not the second”. The same definition can be found in section 99(10)(b) of the Social Security Act 1973 (now repealed) and section 173(b) of the Social Security Contributions and Benefits Act 1992. In line with this, referring to members aged “at least 55 and below 57” may be clearer.

[1] SI 2009/1171

[2] Please see our feedback to HMRC on draft tax legislation for surplus payments to members in a defined benefit pension scheme (7 September 2026)

[3] Section 166(2)(aa) of the FA04

[4] Paragraph 122 of the explanatory notes to Part 3 of the Taxation of Pensions Act 2014 states: “the entitlement to a UFPLS arises immediately before it is paid so that it is tested against the member’s available lifetime allowance at that point”

[5] Paragraphs 23ZB – 23ZC of Schedule 36 to FA04

[6] SI 2006/573