{"id":127190,"date":"2026-10-18T12:25:00","date_gmt":"2026-10-18T11:25:00","guid":{"rendered":"https:\/\/en.econostrum.info\/uk\/?p=127190"},"modified":"2026-10-18T10:56:55","modified_gmt":"2026-10-18T09:56:55","slug":"pension-rules-are-changing-in-2027-dwp","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/uk\/pension-rules-are-changing-in-2027-dwp\/","title":{"rendered":"Pension Rules Are Changing in 2027 as DWP Announces New 12-Month Access Measure"},"content":{"rendered":"\n

The proposed change concerns the medical evidence required when someone seeks to withdraw pension savings because of a terminal diagnosis<\/strong>. It also forms part of government efforts to bring pension tax rules more closely into line with the wider benefits system, while reducing financial pressures on people approaching the end of their lives.<\/p>\n\n\n\n

How the New 12-Month Rule Will Change Pension Access<\/strong><\/h2>\n\n\n\n

Under existing pension tax rules, individuals must provide medical evidence<\/strong> showing that they are expected to live for less than one year. The government plans to replace this requirement with a more flexible assessment under which death can reasonably be expected within 12 months.<\/p>\n\n\n\n

According to the Mirror<\/a>, the revised definition will bring pension tax arrangements closer to the 12-month end-of-life criteria already used by the DWP. The changes are expected to come into force in spring 2027. Pensions Minister Torsten Bell said people facing a terminal illness should not have to navigate unnecessary administrative barriers to access their savings.<\/p>\n\n\n\n

\n

\u201cWhen someone is facing a terminal illness, they shouldn\u2019t have to go through red tape to get at their own pension savings<\/em>,\u201d he said.<\/p>\n<\/blockquote>\n\n\n\n

Under current arrangements, people under 75 with less than 12 months to live can normally withdraw their defined contribution pension <\/a>as a tax-free lump sum <\/strong>if the pot is worth less than \u00a31,073,100.<\/p>\n\n\n\n

Those aged over 75 with a terminal illness are normally subject to income tax <\/strong>at their marginal rate on pension withdrawals and lump sums. The government also intends to engage with pension providers and other organisations about how terminal illness lump sum payments operate and whether further changes are required.<\/p>\n\n\n\n

\"\"
DWP plans to ease pension access for terminally ill people under a new 12-month rule from spring 2027. \u00a9Canva<\/em><\/figcaption><\/figure>\n\n\n\n

Financial Pressures and Wider Changes to Pension Rules<\/strong><\/h2>\n\n\n\n

The announcement has been welcomed by Marie Curie, which has previously examined the financial difficulties experienced by households affected by terminal illness.<\/p>\n\n\n\n

According to the <\/a>same source, Dr Sam Royston, the charity’s executive director of research and policy, said a terminal diagnosis can cause household income to fall while other costs rise.<\/p>\n\n\n\n

He said the proposed changes could provide greater financial security and reduce stress for affected families. Marie Curie also hopes to work with the DWP to ensure the reforms provide additional support for lower-income households receiving Universal Credit. The announcement comes ahead of a separate change to the normal minimum pension age.<\/p>\n\n\n\n

According to the Daily Express<\/a>, the minimum age for accessing private pension savings will rise from 55 to 57 on 6 April 2028, although protected pension ages and transitional arrangements may apply.<\/p>\n\n\n\n

People born between 6 April 1971 and 5 April 1973 fall within a transitional period, with HMRC intending to permit access from their 55th birthday until 5 April 2028. After that date, they may continue taking benefits from funds already accessed, but could have to wait until age 57 before accessing additional pension benefits. The terminal illness reforms remain scheduled for spring 2027, with further discussions planned on their implementation.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Department for Work and Pensions (DWP) has announced plans to change the rules governing access to private pension savings for people with a terminal illness. The new 12-month definition, expected to take effect in spring 2027, is intended to make it easier for eligible individuals to access their money.<\/p>\n","protected":false},"author":10,"featured_media":127193,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[],"class_list":["post-127190","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-retirement","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/127190","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/comments?post=127190"}],"version-history":[{"count":1,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/127190\/revisions"}],"predecessor-version":[{"id":127192,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/127190\/revisions\/127192"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media\/127193"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media?parent=127190"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/categories?post=127190"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/tags?post=127190"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}