The Government have announced plans to increase the State Pension Age to 68 years old. Under the new proposals the increase will be phased in between 2037 and 2039, which is 7 years earlier than originally planned and reflects increased life expectancy in the UK. Those affected by these new proposals are currently between the ages of 39 and 47 years of age.
The rise to age 68, implements the findings of a review by John Cridland, which was published in March 2017. The report to the Government recommended accelerating planned increases in pension age to prevent the costs of the State Pension becoming unsustainable.
When the modern state pension was introduced in 1948, a 65-year-old could expect to spend 13.5 years in receipt of pension income – 23 per cent of their adult life. This has been increasing ever since and in 2017, a 65-year-old on average can now expect to live for another 22.8 years, or 33.6 per cent of their adult life.
The proposal is yet to go through parliament and the Government could face opposition to the plan but the changes seem like an unfortunate necessity, as the current system is unsustainable.
How Nelsons Can Help
For information relating to pension planning, please call 0800 024 1976 or contact us via our online form and ask to speak to a member of our Wealth Management Team.