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Over 65s see pension age rise

Cherry Reynard
Written By:
Cherry Reynard

Anyone over 65 will see their state pension age rise from tomorrow. It is the first increase for men since the modern pension system was introduced in 1948.

It is seven years since the Tory-led coalition government legislated that the state pension age for men and women should rise from 65 to 66 between 6th December 2018 and 6th October 2020. The state pension age is then due to increase to 67 by 2028 and 68 by 2039.

The rises have been controversial. The Backto60 campaign group recently won the right to a judicial review of the UK government’s handling of rises in their pension age. The group, which represents women born in the 1950s says that the changes are unfair and were introduced too quickly for women to adjust their retirement savings plans. The group is demanding state pensions backdated to age 60.

A rise in women’s state pension age was originally scheduled to take place in stages between 2010 and 2020, but the coalition government sped up this timetable in 2018.

Tom Selby, senior analyst at AJ Bell, said: “The short-term impact on people’s finances could be significant. At the lower end, a three-month rise in the state pension age could cost someone over £2,000 in retirement income. Those who have to wait a full year longer could miss out on over £8,000 in state pension. While this might feel like a cruel lottery for those immediately affected, younger generations will need to prepare for rises in the state pension age to 67 and 68. Indeed, if life expectancy continues its long-term trend upwards a state pension age of 70 could well be on the cards.

“For most savers – and particularly younger people – the clear signal coming from the state is that if you want security in retirement, you need to provide it for yourself.”