More pension changes are afoot in the UK.
Pension age versus retirement age
Let me just clarify one point first though; it is often quoted that the age of retirement is currently 60 (sic) for women and 65 for men. That however is not correct.
You can retire when you wish if you have the means to do so. Maybe that is semantics for most of us but the distinction is important.
The ages stated above are when you will receive your state pension, not when you can retire.
That having been said, the actual current state pension age is 63 for women and 65 for men, with the former due to rise steadily until all workers, male and female, retire at 65 by 2018.
From 2019, the state pension age will increase for both men and women, reaching 66 by 2020 and 67 between 2026 and 2028.
Those born after 05 April 1978 will reach state pension age at 68.
Further changes are likely as the Work and Pensions Secretary David Gauke has now announced that the state pension age will rise from 67 to 68 from 2037. He told MPs the Government was accepting the recommendation made in the Cridland review earlier this year.
This brings the change forward seven years earlier than was initially planned as the state pension age had been due to rise by a year – from the current age of 67 – in 2044.
No one born on or before 5 April 1970 will see a change to their current state pension age. There is also no change for those born after 6 April 1978, whose state pension age was already due to rise to 68. It is the “inbetweeners” who are feeling the sense of injustice and are feeling the pinch (yet again).
The further change is largely blamed on the fact that the number of people over state pension age is expected to grow by a third between 2017 and 2042, from 12.4 million in 2017 to 16.9 million in 2042, according to the Department for Work and Pensions.
I do not for a minute think that this is the end of the matter – the goalposts will undoubtedly keep changing in the years and decades to come.
The information provided in this article is not intended to constitute legal or financial advice and each case requires careful consideration in our view by a fully qualified Solicitor (or financial advisor as appropriate) before decisions are made and before you embark on a certain course of action.
Penn Chambers Solicitors
0207 183 2898