State pension age ‘under review’ by Jeremy Hunt in Budget

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Reports suggest the increases in the age someone will be allowed to access their state pension will be brought forward under Jeremy Hunt’s plans. It is claimed the Treasury is looking to bring forward the state pension age rise to 68 to as early as 2035.

If this were to happen, it will primarily affect those who are currently 54, who will only have a decade’s time to prepare.

Ray Black, the managing director of Money Minder, spoke exclusively with about his predictions for the Chancellor’s pending Budget.

He explained: “Once again the state pension age is under review so over 50s will be looking towards the budget with interest to see if we could hear more about the Government’s plans for this.

“There has been much speculation that the state pension age could rise to 68 years old sooner than expected, however, it should also be remembered that this is not a new idea and the Government has always said that it may need to bring this timetable forward.

“If the Chancellor announces the increase in the state pension age is being brought forward by 10 years, it could affect everyone born after April 6, 1967.”

While this decision from the Government has the potential to save the Government billions, the finance expert noted that it is a short-term gain when it comes to issues surrounding the state pension.

Mr Black added: “As such, I would normally expect this kind of announcement (which is unlikely to be well received by those affected) to be made in the early years of a new government.

“This gives plenty of time before the next general election for people to have forgotten about it, rather than being at a time when politicians are mainly focused on gaining votes, instead of losing them.

“Even if the state pension age is not mentioned on March 15, the Government has already told us they plan to review it later this year, although this could of course be postponed until after the next general election if they felt that it would be better to leave it for now.”

This comes amid wider concerns about the viability of the retirement payment with the continued link to the triple lock.

As it stands, the state pension age threshold for both men and women is 66 years old.

However, it is already set to rise to 67 by 2028 and will then go up again to age 68 over a two-year period between 2044 and 2046.

Any changes to the state pension age are based on life expectancy data in the UK and are carried out to help save the Government money.

Despite previous years showing improvements in UK life expectancy, official data suggests this trend has reversed since the pandemic

With this growing issue, making over 50s wait even longer for their pension entitlement would be a controversial decision.

As well as this, Mr Hunt is reportedly looking into ways to incentivize those in their 50s and 60s into getting back into the workforce in order to save money on pensions.

On this issue, Mr Black said: “It’s been widely reported that after the pandemic many workers in their 50s and early 60s decided to retire or semi-retire.

“In addition, over the last eight years, a lot of people have drawn money out of their pension plans when they reached age 55.

“For those that have moved their pension plan into flexi-access drawdown and as a result triggered the Money Purchase Annual Allowance (MPAA) it means the most they can put into a pension plan each tax year is capped at just £4,000, even if they are working part-time and earning more than that.

“For those who have fully retired and are under 75, the cap is just £3,600 per tax year.”

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