Commenting on the Autumn Statement announcement that there will be further increases in the state pension age, Malcolm McLean, consultant, Barnett Waddingham, says:
“Further rises in the state pension age and linking it to life expectancy are not unexpected given that people continue to live longer and therefore the cost of providing a state pension will inevitably increase.
“These changes are most likely to be of greatest concern for people in their late 40s who will now have only a relatively short time to plan for this later state pension age. For many individuals – especially those with very physical or demanding jobs – a longer life expectancy doesn’t necessarily mean that they will all have the physical or mental capacity required to continue in their current occupations to such higher retirement ages.
“It should be emphasised that state pension age and the age at which you retire are not necessarily the same. There are some who may need out of financial necessity to stay in work up to or even beyond the state pension age. Others who have a desire to retire from work at an earlier age will need to try to boost their private pension saving with a view to securing an income when they wish to finish work, leaving the state pension to come in at a later date.
“This all highlights the need to start private pension saving at the earliest possible age. And again underlines the growing risk around relying on the government to provide you with a state pension at an age that you had previously expected.
"The need for the government to check life expectancy figures periodically and take them into account in reviewing any further changes to the state pension age is sensible, provided any further changes that are then implemented give at least ten years notice to the individuals impacted, allowing them to plan properly for their retirement.
“For young people currently in their twenties it seems likely that they can look forward to a state pension age of 70 or even higher. Ironically that was the age when the first state pension was introduced in 1909, in a very different era and in very different conditions.”
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