Pension Credit: 'Thousands' of people haven't claimed says expert
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The French Government is proposing a bill which will see the legal retirement age in the country raised from 62 to 64. However, this is lower than the current state pension age in the UK which is at 66 years of age. On top of this, the British Government has proposed similar changes to the state pension as its peers in France which will see the retirement age threshold hiked to 67 in the next few years.
How is the state pension changing in France?
In France, an estimated one million people have taken to the streets in protest with further industrial action expected at the end of the month.
Similar to the UK, residents in the country receive a state pension which is based on the redistribution of a tax paid for by working people to those in retirement.
As it stands, the average French pension for 2023 stands at €1,400 a month, which comes to £1,229, once taxes are deducted.
It should be noted that there are different pension rules depending on profession with some professions allowing for early retirement.
Under the French Government’s pension reforms, workers who were born in 1961 and were supposed to retire in 2023 will need to work three extra months.
Anyone born either 1968 or after will need to be at least 64 years of age to get their full state pension and have worked 43 years on top of that.
Those who are unable to meet these conditions will have to wait until the age of 67 to get a full state pension which is the same as the current system.
Taxpayers in France who started working from the age of 14 to 19 will be allowed to get early retirement, alongside people who have health conditions.
According to the Government, the pension reform will mean the minimum pension to be increased by €100 (£87.82) to €1,200 (£1053.89).
How much will the UK state pension be increased by?
The retirement threshold is 66 years old but the UK Government has confirmed this will increase in the near future.
As it stands, the state pension age will go up to 67 by 2028 if existing proposals remain in place.
State pension age rises are based on life expectancy data in the UK and are carried out to help the Government save money.
However, older Britons on low income will have to wait longer for vital support once this age hike takes place.
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Tom Selby, the head of retirement policy at AJ Bell, explained: “No country has experienced quite as much controversy over state pension reform as France, with the Government previously reluctant to push through change for fear of sparking mass protests.
“Indeed, pensions were part of the reason we saw the angry ‘Gilet Jaunes’ demonstrations in 2018 and 2019.
“However, all countries will eventually have to face up to the demographic time bomb, with a growing older population and a shrinking younger population to support them.
“In the face of this, increases to the state pension age are ultimately inevitable. While a two-year rise in the state pension age will undoubtedly be unpopular among French voters, it is hard to imagine this relatively moderate increase will be the end of the story.”
However, the pensions expert warned that the UK Government will face similar backlash with further changes to state pension that are being proposed.
He added: “State pension age controversy is on the horizon in the UK too, with a review into the state pension age set to be published in the coming months.
“The review is expected to determine when future retirees can expect to receive their state pension in the UK. Recent data suggests life expectancy improvements have stalled, which some will argue means state pension age increases should be scaled back – or even cancelled altogether.
“But those downward shifts in life expectancy projections, in part a result of the pandemic, come after decades of rapidly rising longevity.”
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