In the wake of the government’s sweeping pension reforms, all the news has been about the legalisation of pension busting, whereby anyone with a UK-based pension will be able to cash in their entire pension pot from age 55.
However, the pension reforms didn’t just alter the landscape for money purchase schemes: the State pension has also been revised.
The State Pension age will be increased to 66 between 2018 and 2020, 67 between 2034 and 2036 and to 68 between 2044 and 2046, for both men and women. The government has also said it will review the State Pension age every five years, with the first review due to take place in the next Parliament. This review will include an analysis of life expectancy by the Government Actuary’s Department (GAD).
Other changes include a simplified single-tier pension. This will provide a higher flat-rate pension of at least £148.40 per week.
However, while it is ‘simplified,’ many are unsure what they actually qualify for.
According to an article posted in The Telegraph this week, Steve Webb, the pensions minister, admitted he may have “oversimplified” the new state pension and “in the meantime, some people will get more and others less than the full single-tier amount.”
Whatever the state pension will be when it comes to your retirement, one thing is certain – it won’t be enough to live a life of frills and fancies. If you’d like to enjoy your retirement and do the things you’ve always dreamed of, there’s only one way to make this possible: save more money while you’re working.
If you would like a retirement income review, please contact Alex Herbert via email: firstname.lastname@example.org today.