How Will the Proposed Increase in State Pension Age Affect You?

Department for Work and Pensions - State Pension Age

 

For many of us, the state pension will be our main source of retirement income. However, as life expectancy continues to rise, the number of people in receipt of state pension and the length of time they receive it is growing too. Recent forecasts by the Office of National Statistics suggest the number of people in the UK over state pension age will increase by a third between 2017 and 2042, from 12.4 million in 2017 to 16.9 million in 2042. This has prompted the government to propose further increases in the state pension age.

The state pension age is the earliest age you can receive your state pension (this may differ from your workplace or private pension age). For men, the current state pension age is 65 and for women it’s 63. However, under new government proposals, the state pension age will be equalised for men and women at 65 years old by the end of 2018. It will then rise to 66 years old in 2020 and 67 in 2028.

Under the current law, the state pension age is due to rise to 68 years old between 2044 and 2046. However, following a recent review the government has announced that these plans have been brought forward. Therefore, the increase to 68 years old will happen between 2037 and 2039. Parliament will need to approve the proposed changes before they are introduced.

If you would like to check your state pension age under the law as it currently stands
click here.

For the current 2017/2018 tax year the state pension is £159.55 per week. To qualify for the full amount of state pension you will need 35 years of National Insurance record. You also have the opportunity to defer your state pension. For each year you defer, you’ll get around a 5.8% increase.

If you’re interested in setting up a private pension or investing for later life, ADN Financial Solutions can advise you on the best options available. To arrange a free consultation please call us on 02392 822 616.

Please note: The value of investments and pensions and the income they produce can fall as well as rise. You may get back less than you invested. There are regulations in place that minimise risk, but how pensions are protected depends on the type of scheme.

 

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