On the go: The majority of people impacted by the rise in the normal minimum pension age are unaware it is happening, the Pensions Management Institute has warned.
According to research from the PMI, published on December 29, which surveyed 2,000 individuals, 82 per cent of working people in their forties were not aware of the upcoming rise in the NMPA, which is set to increase from 55 to 57 in April 2028.
The PMI said this change will directly affect the retirement options for those currently in their mid to late forties.
The increase in the NMPA has been criticised across the industry as it will not apply evenly to everyone and will add extra complexity to the pensions landscape.
For those earning benefits in a public service pension scheme, and those who are members of certain private sector arrangements offering protected pension ages, the NMPA will continue to be 55. But for others it will rise to age 57.
Just over a third of those polled (35 per cent) considered this difference to be unfair.
After being made aware of the change, 38 per cent expected to be impacted but a further 25 per cent did not know if the change would affect them.
PMI president Lesley Alexander said: “It is vital that the general public understands clearly what their retirement choices are.
“With the pensions dashboards due to arrive in 2023 — giving people the chance to review all their pension savings in a single place — it will only cause confusion when people learn that they will become eligible to draw benefits at different ages.
“The need for a new communication programme to explain this to the public has become urgent.”
A government spokesperson said: “We announced the change in the NMPA to 57 in 2014, 14 years in advance of the change to give people time to make financial plans.
“We are revolutionising how consumers keep track of their pension information by introducing pensions dashboards — a single online place for people to access via their digital device at any time, putting the saver more in control and transforming how they think and plan for their retirement.”
The PMI also found that only 4 per cent of those polled knew the current NMPA and just 14 per cent had spoken to an adviser about planning for retirement.
The government had originally given people until April 2023 to either join or transfer into a scheme that could offer a protected pension age.
But in November it U-turned and closed this window without prior notice. The last accepted applications for transfer had to be made before midnight on November 3.
The pensions industry has warned about complexities brought about by the age change, especially where people in a scheme with a protected pension age decide to transfer and end up in a scheme with two different NMPAs.
Quilter has written to MPs to ask them to amend the finance bill to avoid “decades of complexity” and to table an amendment to ensure that individual transfers are treated in the same way as block transfers.
Currently, if an individual with a protected pension age transfers through a block transfer they will get the protection at scheme level, meaning any new money paid into the scheme will also enjoy a lower pension age.
However, if they transfer on an individual basis, only the transferred amount will receive the protection, anything else will be accessible from age 57.
This article originally appeared on FTAdviser.com
