A big update has been issued for people who claim the State Pension from the Department for Work and Pensions ( DWP ). The state pension age is currently 66 for both men and women, and is increasing to 67 between 2026 and 2028.
The age will rise again from 67 to 68, and this is timetabled for between 2044 and 2046. Mark Screeton, CEO at life insurance firm SunLife, warned: “If the state pension age were to rise to 68 by the early 2030s rather than 2044-46 as currently planned, millions could be left struggling with no private pension savings to fall back on.
“While some may be able to continue to work until 68, there are a number of barriers preventing many people over 50 from staying in work.” Mr Screeton also set out one argument for why increasing the state pension age from 2044 may make sense.
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He said: “Arguably, the pension age does need to rise in line with life expectancy, but not before 2044. By 2044, pensions auto-enrolment will have been in place for more than 30 years, meaning far fewer people will be relying on the state pension alone.
“Assuming the age for accessing a private or workplace pension does not change significantly – it is currently 55 and is due to increase to 57 by 2028 – this should mean more people will be able to retire earlier than 68 if they wish.”
A DWP spokesperson said: ” There is a statutory requirement to review the state pension age set out in the Pension Act 2014 and in line with legislation, the next review must be completed by the end of March 2029.”
Alex Pugh, chartered financial planner at wealth management firm Saltus, said: “Pensions are one of the most phenomenal vehicles for growing your money. If you’re a higher-rate taxpayer, the potential tax saving is equivalent to a 72 percent return just by putting the money into a pension.”
Mike Ambery, retirement savings director at Standard Life, part of Phoenix Group, said: “The so-called Gen X group of people in their mid-40s or 50s now are particularly at risk. Many slipped through the gap between the phasing out of defined benefit schemes in the private sector and the introduction of auto-enrolment in 2012, that has meant the vast majority of workers now have a pension.”
Mr Ambery warned: “For those looking to take control of their finances we’d recommend gathering information about your savings and using free tools to work out the level of income you’re on track for in retirement. These will often show how outcomes will change with additional contributions and allow you to weigh up whether additional saving is required.”