Major state pension change arrives in days – older Brits hit hard | UK | News
Financial experts have warned of the difficult situation facing many older Britons as a major new overhaul of state pensions begins. The State Pension Age (SPA) will gradually rise to 67 over the next few years, and as the increase will occur gradually over time, when you can retire will depend on your exact date of birth. From next week, one month will be added to the state pension age every two months.
This will end in April 2028, when the state pension age will be 67 for everyone. In other words, all workers born after April 1960 will begin to see their retirement age rise. There will be periods where the state pension age is 66 years and one month, 66 years and 11 months, and periods in between. The Center for Standard Living for the Future of Pensions said people over 60 may need additional support amid the changes, with many missing out on state pensions without expecting it.
Meanwhile, the Institute for Fiscal Studies has warned this could increase poverty rates among older Brits. A recent report said: “These increases only partially compensate for the loss of direct income as SPA increases, as only a minority of those affected responded to the reform by working longer hours.
“Previous research shows that average income is significantly lower among affected individuals as they have to wait longer to receive the state pension. Lower household income also leads to an increase in income poverty – when the SPA was increased from 65 to 66, the income poverty rate of the affected age group (65-year-olds) increased from 10% to 24%, with the effects concentrated among those outside paid work.”
It also called on the government to give people more notice of changes to the State Pension Age so they can plan accordingly.
“This will mean that any changes occur before most people leave paid work to retire, giving people time to adjust their savings and retirement plans,” the report said.
“If the government wants to increase the SPA to 68 by the end of the 2030s (suggested in the 2017 independent review), it will need to do so immediately to maintain the principle of 10 years notice of any proposed changes.”
A further increase in the State Pension Age is planned for the 2040s, which will eventually reach 68. Meanwhile, experts have warned that SPA could go up to 80 for younger generations.
Additionally, the Center for Standard Living for the Future of Retirement found that more than an estimated 250,000 people ages 60 to 64 live in relative income poverty; This figure is higher than those living in similar conditions in the 2010s.
