Millions of men and women may have to wait a year longer to receive their state pension after the Government have announced plans to raise the retirement age to 68 earlier than planned.
Under current legislation, the State Pension age increase from 67 to 68 is to be phased in between the years 2044 and 2046. The Government, however, now plan to implement this increase seven years earlier. Should this proposed change go ahead, this means that the State Pension age will thus increase to 68 between 2037 and 2039 instead.
Who will be affected?
Based on the new proposal, men and women born between April 6 1970 and April 5 1978 will be affected. This equates to approximately six million people, who are currently aged between 39 and 47.
No one born before April 5, 1970 will be affected by the change. Currently, those born since April 6 1978 already face a state pension age of 68.
Will these changes go ahead?
At present, this is simply a Government proposal and will therefore need to be approved by Parliament. In response to the new plans, Secretary of State for Work and Pensions, David Gauke said:
“Combined with our pension reforms that are helping more people than ever save into a private pension and reducing pensioner poverty to a near record low, these changes will give people the certainty they need to plan ahead for retirement”.
Auto enrolment has helped more than 8 million people to save into a workplace pension, in order to boost their retirement pot.