People are not free to draw their pension whenever they want; there are restrictions placed on when savers can access their funds. The Normal Minimum Pension Age (NMPA) is the main instrument through which pension access is moderated.
What is the Normal Minimum Pension Age (NMPA)?
The NMPA is the earliest age that Britons can draw from their retirement fund.
It is in place to prevent people from accessing their pot too soon and therefore running out of money in retirement.
Britons could face an unauthorised payment tax charge if they withdraw money from their pension before reaching their NMPA.
READ MORE: State pension warning: Britons urged to check record to ensure they get full sum
However, changes are coming which will increase the NMPA.
In April 2028, the NMPA will rise from age 55 to 57.
This means people wishing to access their private pension will have to wait an extra two years.
The aim of changes to the NMPA is to help ensure people’s retirement savings are capable of providing for their entire retirement, which can be more difficult as life expectancy increases.
It will coincide with the next increase to the state pension age.
The state pension age is set to rise to age 67 by April 2028.
The NMPA was first introduced in 2006 and set at age 50.
It was then increased from to age 55 in 2010.
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.
