10 December 2013

State Pension Age Continues Upwards

The Government wants to raise the State Pension Age (SPA) at a faster rate according to the recent Autumn Statement. The increases to ages 66 and 67 are due to go ahead in 2018 and 2026 as planned. The increase to 68 was due to take place in 2046, but the Government wants to bring this forward to 2036. And at the same time it has laid out another set of proposed increases to happen every ten years, until the SPA hits 70 for all those born, probably, after 1990.

Given increases in longevity, and the financial savings generated, the increases in SPA are inevitable. Potentially it means someone born today is unlikely to receive any state pension benefits until at least their 72nd birthday.

It's worth bearing in mind that you don't have to take all your pension benefits at the same time as  you reach SPA. With sufficient pension savings you can take a pension earlier or later. But it does make personal savings ever more important in the retirement planning jigsaw, along with taking financial advice around how and when to take benefits.

Here's a summary of the current situation (with thanks to MGM Advantage)...

When? What? Who?
Previously announced Between 2010 and 2018 Women’s SPA to increase gradually to age 65 Women born between April 1950 and December 1953
Between 2018 and 2020 Everyone’s SPA to increase to age 66 Those born between December 1953 and April 1960
Between 2026 and 2028 All SPA’s increase to age 67 Those born from April 1960 until around the end of the 1960s
Proposals within this autumn statement Mid 2030s All SPA’s increase to age 68 Approximately those born in the 1970s
Late 2040s All SPA’s increase to age 69 Approximately those born in the 1980s
At a later date All SPA’s increase to age 70 and beyond, in line with increases in longevity Likely to be anyone born after 1990

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