The chancellor George Osborne confirmed in his autumn statement that the state pension age will rise to 70 for the under 30′s. The SPA has already been slowly rising for those over 30 to increase it from the old standard of 60 for women and 65 for men which went by the board when the pension ages were equalised for men and women. There are now stepped pension ages for those coming up to retirement in the next few decades.
Although this may strike some as a hard blow that they have to wait much longer in order to claim their state pension, in our view it is an inevitable progression and will likely rise even higher as time goes on. It seems impossible that pension ages will not increase further due to factors such as:
- the increase in life expectancy
- the cost of providing ever larger numbers of pensioners with this state benefit
- the demographics of the population making the number of pensioners in relation to those under the state pension age much higher
The increase in state pension age will mean that most people will have to work longer before receiving the benefit. However, for a lot of people these days, working past 65 is not so much of a chore as people live longer lives, are healthier and don’t actually want to stop working at that age as they are fully capable of carrying on for much longer.
65 today is possibly considered similar to 55 a few decades ago both in terms of health and life expectancy. Not only that but people are also needing to work longer due to financial reasons and so cannot actually afford to retire.
One good thing about working for longer is that people are able to build up a bigger pension pot for themselves to give them a better retirement income. The key is to start building up this fund as soon as possible so that the benefit of compound interest can be gained over a longer period. Also annuity rates at an older age will be better so that more income can be gained from the same pot of pension funds (although it is debatable that in a few decades time due to increased life expectancy annuity rates will decrease to similar levels that you might find for younger ages now).
If you want to find out when your state pension age is then the Government provide an online calculator that can tell you either the age that you will be able to take your state pension and/or the amount that you can expect to receive.
State Pension Age Calculator
Just enter your date of birth and gender and it will tell you your State Pension Age.