Normal Minimum Pension Age (the earliest age at which most pension benefits can be drawn) changed from 50 to 55 on 6 April 2010. At the time HMRC said that as long as arrangements were in place to receive the payment as at 5 April 2010 then a member could qualify for the age 50 NMPA, even if payment had not actually been received. At the time we noted that this was not quite what the legislation said. HMRC has now recognised its mistake but will not be seeking unauthorised payment charges from those who relied on the original statement:

“In Newsletter 38, HMRC incorrectly stated that the relevant date was the date on which the member first became entitled to draw their pension. HMRC is aware that some scheme administrators and members have acted in reliance on that Newsletter in deciding to draw their pension before 6 April 2010 from an age of more than 50 but less than 55. In such cases, where the first pension payment does not occur until after 5 April 2010, the prevailing NMPA of 55 in fact applies. Nevertheless, HMRC accepts that in these circumstances people and schemes should not incur an unauthorised payments tax charge in respect of any payments of that pension made before age 55 is reached.”

The full statement from HMRC can be found in Newsletter 44. The Newsletter also contains a useful summary of pensions matters covered in the Finance Bill 2011.