Change to State Retirement Age
On 19th July, David Gauke, the Work and Pensions secretary announced the government’s intention to raise the state pension age to 68, eight years earlier than originally planned. This change will raise the state pension age to 68 with effect from April 2037. It has long been acknowledged that individuals are living longer and this ultimately has an impact on the government’s ability to support pension payments, hence this latest move by the government. The measure will have to be passed through the House of Commons, and could well falter if opposition is strong, but it demonstrates a clear intention to delay payment of the state pension. Even if the proposal is not successful, this topic is likely to be under constant scrutiny and raising the state pension age will be a constant threat.
The state pension should never be the sole source of retirement income for anyone. Although it is a welcomed payment, it is only intended to provide a basic living standard, and individuals wishing to have a comfortable retirement will need other sources of income. The message for everyone is to think ahead and plan for retirement as soon as possible. This is particularly so for individuals who work in a physically demanding role where the ability to continue working until age 68 is questionable.
Saving for retirement can bring multiple benefits:
Provide a resource to call upon to fill the gap between stopping work and receiving state pension
Act as an additional ongoing income for a better lifestyle in retirement
Expand options as retirement approaches so that retirement can be phased in gradually, such as reducing the working week
Added security if ill-health means that early retirement is forced upon you
Future planning does not have to mean making pension contributions. There are many forms of saving, each with its own pros and cons. The important point is that some form of saving takes place and continues each year, with periodic reviews to monitor progress.
Our financial services team are ideally placed to advise clients on the various savings options available and how they can be used in a ‘plan for retirement’. If you would like to gain a better understanding of what your current planning could do for you, or if you want to make a start with your planning, please contact Jenny Armstrong, Chartered Financial Planner or Gary Jackson, Independent Financial Adviser on 01900 603623.
