Retirement expert advises people to learn about their state pension
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State pension age is currently set at 66 after a number of changes which saw equalisation between men and women, and then uprating. However, this is not the last of the alterations, and the state pension is set to rise – to 67, and then to 68. This could have major implications in terms of retirement, and when people can expect to receive support from the Government.
Andrew Tully, technical director at Canada Life, spoke exclusively to Express.co.uk on what the changes could mean for Britons.
He said: “The simple fact is, on average, we are living longer.
“Without increases to the state pension age, a much higher financial burden would fall on the next generation.
“The increasing state pension age means we potentially have longer to save for our retirements.
“However, even then, many of us won’t have enough savings to give us the income we would like in our retirement years.”
The state pension is increasingly becoming viewed as a financial “safety net” in retirement.
Currently, the full new state pension is worth approximately £9,339.20 per year, which means a person is unlikely to be able to get by on this sum alone.
Indeed, research by the Pensions and Lifetime Savings Association showed it will cost individuals £20,000 per year to live a “moderate lifestyle” in retirement.
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This includes the cost of essentials, such as food shopping, plus some luxuries such as two weeks away in sunnier climes, and semi-regular costs like birthday presents and money for special occasions.
Consequently, other forms of income are likely to be necessary to provide comfort in later years of life.
Mr Tully therefore stressed Britons need to be considering their options when it comes to their finances.
He guided Britons towards looking at any wealth they might have tied up in existing assets.
This, for example, could include property, which could provide a financial solution in later life.
In this sense, equity release is often seen as a sensible option for many older people in the UK.
MoneyHelper explains this process is about letting people access the equity tied up in their home.
Individuals will be able to take the money they release either as one lump sum, or, in several smaller amounts – or a combination of both.
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However, people should always consider whether this is the best option for them.
Britons are encouraged to consult a financial adviser before making this kind of move.
This is because the matter can become particularly complex, and individuals will need all information and details at their disposal before making a final decision.
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