05 May, 2016
Mid-40s to early 50s could retire a year older
deVere Group can report that some people in their mid-40s to early 50s may be forced to work an extra year under new state pension age rules.
An official review into the state pension age is due to be published next year according to Pension Minister Baroness Altmann, which will recommend that the state pension age should not move above 67 until 2030. However, whilst this may seem like good news to some, deVere Group understands that this is 9 years earlier than current predictions for the state pension age to begin to rise above 67, leading to some missing out.
George Osbourne announced in 2013 that the state pension age should “keep pace with life expectancy”, introducing a new formula which would see the age rise in relation to the average amount of time people live for. With the potential for the age to now begin its increase to 68 before 2030, some pensions experts are predicting that people currently aged between 46 and 55 could lose out on a year’s worth of income, dramatically impacting upon their retirement.
The ONS’s projections for life expectancy was revised down recently, meaning that current calculations based on Mr Osbourne’s formula would see the state pension age reach 68 in 2041. However, Baroness Altmann’s comments about the official review to be published next year could well change this, with younger generations who have just started to work expected to see their retirement age balloon into their mid-70s.
Pensions consultancy partner, David Robbins, summed the bleak outlook up, commenting: “Recommendations made today about peoples’ pension circumstances in years or even decades to come tend to be met with shrugging shoulders, but just because it feels far away it doesn't mean it won't cause real pain in the long run. These forecasts could spell difficult times ahead for many people”.
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