Think tank, The Centre for Social Justice, has proposed an increase in State pension age to 75 within the next 15 years. The Department for Work and Pensions said this is not Government policy. It has committed to giving 10 years notice of any further increases. For current State pension ages see the table below.
Current State Pension Ages
Age now |
60 |
55 |
50 |
45 |
40 |
State retirement age |
66 |
67 |
67 |
68*1 |
68*1 |
*1 Currently 67 but proposed to be increased to 68.
Private pensions can be accessed from age 55 onwards, or sooner if in severe ill health. It is possible to make withdrawals before the State pension starts, to gap fill income before then and then stop or reduce these when State pension commences. So how can people plan a retirement to start at a time of their choosing, despite the rising State retirement age?
- Invest in a cash flow plan. The more you can define the lifestyle and level of net income you are likely to need to live it, the better your chances of achieving it. It will help define the gap between when you would like to retire and your state pension age. It can inform the level of investment risk needed and the amount you must save. It can be updated from time to time, to take account of investment returns on savings, inflation and taxation and changing personal circumstances.
- Join your employers pension scheme at the earliest opportunity. All employers are required to pay into a pension for employees who earn £10,000 pa or more and those whose earnings are in excess of £6,136pa may also join voluntarily. Employees pay 4% of their eligible earnings (up to £50,000 pa) with the employer and 20% tax relief matching this.
Kay Ingram
Director of Public Policy, LEBC
Please remember, no news or research item is a recommendation or advice to buy. LEBC Group Ltd is not responsible for accuracy and may not share the author’s views. The contents of this blog are for information purposes only and do not constitute individual advice. A pension is a long-term investment. The fund value may fluctuate and can go down. The value of an investment and the income from it could go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested. If you are unsure of the suitability of any investment or product for your circumstances, please contact an adviser. All information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation, are subject to change. Taxation advice is not regulated by the FCA. The Financial Conduct Authority does not regulate some aspects of Auto-enrolment.
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