From April 2010 pension rules will raise the earliest age at which Local Government Pension Scheme (LGPS) benefits can be taken (with employer permission) from 50 to 55 for those who were not in the LGPS before 6 April 2006.
The minimum retirement age will be raised from 50 to 55 for all pension schemes from April 2010. Most schemes will, however, not enjoy the protection afforded to pre April 2006 members of the LGPS and will therefore instantly have a new minimum retirement age of 55.
If you are thinking about transferring to a personal pension before 1 April 2010 to access tax free cash before age 55, we would draw your attention to the following:
• Transferring to a personal pension exposes you to investment, morbidity and mortality risks.
• It will also incur charges that reduce your retirement benefits.
• Leaving the LGPS may mean that you are reducing your future options, for example on linking up service and on being granted a redundancy retirement.
We would therefore suggest that if you are thinking about transferring LGPS benefits to a personal pension you take financial advice.