The Government has proposed allowing some members of the Local Government Pension Scheme to continue to access their cash from 55

Millions of public sector workers will be able to continue to take their pensions at age 55, despite changes coming in that will mean most people cannot access their pensions until they are 57.

The Normal Minimum Pension Age (NMPA), the age at which most people can access their pensions, is currently 55, but this is due to rise to 57 from 2028 – roughly 10 years before people can start claiming their state pension.

That means people will have to wait an extra two years before they can access their retirement savings.

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But in a consultation published this week, the Government proposed allowing members of the Local Government Pension Scheme (LGPS) who joined the scheme before November 2021 to continue to access their cash from age 55.

The LGPS is a national pension scheme for people working in local government or working for other employers that participate in the scheme.

Meeting notes from July of this year show that the pension scheme’s committee had recommended increasing the pension access age to 57 for LGPS members, but the Labour Government has gone against those recommendations.

The Government’s proposal says: “For those members who were in the LGPS immediately before 4 November 2021, the member will still be able to take pension benefits from their protected pension age, which will be age 55.”

There are approximately 2.1 million active members of the LGPS in England and Wales, and another 2.6 million “deferred” members – people who no longer contribute to the scheme – meaning around 4.7 million people could benefit from the plans.

Steve Webb, former pensions minister and now partner at consultants LCP, said: “While most people will work on past the age of 55, the potential to access a pension at 55 remains a valuable flexibility.

“In local government, the opportunity to take a full pension at age 55 is an important source of security at a time when council jobs are under threat because of local government reorganisation or general cutbacks.

“Confirmation that the government plans to retain a normal pension age of 55 for those who satisfy certain conditions will come as a great relief to those worried about their jobs and still with mortgages and other financial commitments to meet”.

What if I joined the scheme after November 2021?

While members who were in the scheme before the November 2021 date will keep their protected pension age, members who have joined the scheme more recently will not benefit.

The Government consultation says: “For those members who do not meet the cut-off point of immediately before 4 November 2021 and so do not have a protected pension age, the NMPA will rise to age 57, in line with the Finance Act 2022.”

Those who transferred pensions from a scheme with a protected pension age into the LGPS will also not be able to take advantage of this, and their NMPA will still rise to 57.

The Ministry of Housing, Communities and Local Government has been contacted for further comment.

How to boost your retirement savings

If you are hoping to retire early, it is a good idea to look at how much money you have and when you will receive it so you can budget.

First, make sure you know where all of your pension money is. You may have one or more workplace pensions from previous jobs.

Look for any paperwork relating to old pension schemes, or contact your old HR departments and ask what pension provider they use if you aren’t sure who your money is with.

You can use a tracing service to help track them down – the Government offers a free pension tracing service, or you can use a service like Gretel, which just requires your name and address.

You could then consider combining all your old pensions into one new pot so you can keep track of them. Aim to pick a scheme with a low fee, as high charges can eat away at your retirement savings.

Check how much state pension you are due to get too. The amount you get is based on your national insurance contributions throughout your working life. You can check what you are set to receive on the gov.uk website.

If you are short of the full amount, you may be able to pay to top up some missing years on your national insurance record to boost your state pension.

Increasing contributions into your private pensions can boost your savings long-term through compound interest.