State Pension age could be reviewed due to pandemic says expert
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A review into the state pension age timetable has been launched by the Department for Work and Pensions (DWP) with potentially major implications. If recommendations are taken up, it could mean 68 becomes the state pension age sooner than currently planned. Currently, the state pension age is 66, but this is guaranteed to rise in the coming years.
Adrian Lowery, personal finance expert at Bestinvest, explained the review, and what is likely implications are.
He said: “The Department for Work and Pensions is taking another look at the issue of when the increase in state pension age to 68 should kick in.
“Both men and women’s state pension ages are currently 66, and between 2026 and 2028 they will both rise to 67.
“The increase to age 68 is currently scheduled to happen between 2044 and 2046, which would affect those born on or after April 1977.”
A Government review has already made recommendations to bring this forward to 2037 to 2039.
This is as a result of factors such as life expectancy which has fluctuated in recent years.
However, it also considered projected costs to the Treasury as well as labour market trends.
Mr Lowery continued: “This would mean people born from the early 1970s onwards face a later state pension age.
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“In turn, this could force a delay in retirement for those cohorts.
“However, there is also speculation that slowing gains in life expectancy will prevent the current review recommending the controversial step.”
The review is scheduled to last for a while, and, in accordance with the law, it must be published by May 7, 2023.
The Government has said the latest state pension age review will consider evidence from across the UK.
It will consider differences across countries and regions, including Northern Ireland.
It is also set to consider the “effects for individuals with different characteristics and opportunities, including those at risk of disadvantage”.
However, one expert has recently argued the Government’s plans may be “blown out of the water” as forecasted increases in life expectancies have failed to materialise.
Projections by the Office for National Statistics (ONS) in 2014 suggested a 66-year-old woman today could expect to live, on average, to around 89.
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But projections based in 2018 now expect the same woman only to live to around 87.
The firm Lane Clark Peacock (LCP) has therefore asserted it will be “very difficult” for the Government to justify a rapid increase to the state pension age.
Sir Steve Webb, partner at LCP, said: “Pension ages for men and women reached 66 only last year, and there is now no case for yet another increase so soon.”
A DWP spokesperson recently told Express.co.uk: “The state pension continues to provide the foundation for retirement planning and financial security in older age.
“The Government is required by law to regularly review state pension age and has just announced the beginning of the second state pension age review.
“The Review will consider whether the rules around state pension age are appropriate, based on a wide range of evidence including latest life expectancy data.”
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