Over 8 in 10 workers in their 40s unaware of upcoming NMPA increase

More than eight in 10 (82 per cent) workers in their 40s could be caught out by the planned rise in the normal minimum pension age (NMPA), according to the Pensions Management Institute (PMI).

The organisation found that these workers were not aware of the upcoming increase from 55 to 57 in 2028.

The planned rise in the NMPA was set out in the government’s 2021/22 Finance Bill and will directly affect those people currently in their mid to late 40s.

According to the PMI’s research, 78 per cent of respondents felt that that Treasury should have communicated the policy change more effectively.

“The results of this research are particularly worrying, as they suggest strongly that the government has failed to make the general public aware of a significant change in pensions policy,” commented PMI president, Lesley Alexander.

“Many of those seeking to draw benefits as soon as possible may be shocked to learn that they will have to wait. There is very real potential for another embarrassment.”

The NMPA increase will not apply to everyone, with public service pension scheme members and certain private sector scheme members exempt from the change.

The PMI found that 35 per cent of respondents considered this difference to be unfair.

After being informed about the change, 38 per cent expected to be affected and 25 per cent were unsure about how it could affect them.

The research also found that only 4 per cent could identify the current NMPA and 14 per cent had spoken to a financial adviser about planning their retirement.

“The failure to communicate the change to NMPA effectively is complicated by the fact that it does not apply to everyone,” Alexander continued.

“This means it is vital that the general public understands clearly what their retirement choices are.

“With the pensions dashboard 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 normal minimum pension age 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.”

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