Before 6 April 2006, pension plans for professional sports people could have a lower-than-normal minimum pension age. HMRC maintained a list of these occupations; for example professional football players could retire from age 35 and this entitlement could continue after that date.
Pension plans taken out after 6 April 2006 normally can't include a minimum pension age of earlier than age 55 even for sports people. However, if a plan with a low pension age is block transferred into a new plan, the low pension age is protected and applies to the new plan.
Where the individual crystallises their benefits before 50, their level of lifetime allowance is reduced by what is called the relevant percentage.
The individual’s lifetime allowance is reduced by 2.5% for each complete year between the date on which the benefit crystallisation event occurs and the date on which the individual will reach age 55 (or 57 from 6 April 2028). So, for an individual pre-2028 with a protected pension age of 35, who takes benefits on their 35th birthday, has 19 complete years between their 35th birthday and age 55. This means their lifetime allowance is reduced by 47.5% (19 x 2.5%). The reduced lifetime allowance alters the individual’s available lifetime allowance both for the purposes of calculating whether any lifetime allowance charge is due and in terms of the maximum pension commencement lump sum payable.
PTM062220 - Member benefits: pensions: protected pension age: right to take benefits before age 50