Today the government announced an acceleration to age 68 for some retirees.
State Pension Age Proposed Changes
Today (19 July 2017) the government announced proposed changes to the State pension age as a result of the review that was undertaken and completed earlier this year by John Cridland.
Having studied the results of the review (you can find more details about it here), changes have been announced that would bring forward the date at which a retirement age of 68 will be introduced, once these proposals have passed through legislation. Read More
If you were born in 1982 then you are part of what is known as ‘Generation Y’ or the Millenials. This can include anyone born up until the year 2000, as definitions vary.
Those born in this time are seen to be more tech savvy but also have problems in terms of buying their own homes and saving for retirement. One issue that they also have right now is that they do not know exactly when they are going to be able to retire! Read More
If you were born in 1980/81 then you are classed as being part of ‘Generation Y’ which includes anyone born up until the year 2000. Retirement ages for this generation are not currently set in stone but you should be able to have a reasonable idea of when you can retire and as time goes on this will become more definitive (and we will update any changes here). Read More
What is my retirement age if I was born in 1978? (Updated March 2023)
If the above question applies to you then then the answer to this question is a bit up in the air. According to the Pensions Act 2007 (which is currently the most recent legislation on State Pension age), there was a difference for those who were born before 6th April 1978 and those who were born on or after that date. Read More
So you were born in 1976 and maybe you are confused about when your retirement age is as there have been so many changes to State pension ages in the last few years and also many proposals for changes.
There is legislation in place that dictates when people are able to retire and draw their State pension at the moment but those ages/dates can change if further legislation is introduced. Read More
Were you born in 1975 and want to know at what age you can retire?
As there have been a lot of changes in State Pension age over the last few years and decades, it has become quite confusing to many people as to when they will be able to claim their State Pension.
The age at which you can collect your State pension may also differ from the age at which you can draw your personal or your company pension, so you should check your pension policies for those details. Read More
For anyone who is keeping an eye on the State Pension age review they will be interested to hear that John Cridland’s report on the Review in State Pension Ages was published today by the government. The Pensions Act 2014 requires that State Pension ages are reviewed in every parliament and this review was due to report by May 2017.
Mr Cridland’s report also coincided with a review by the Government Actuaries Department (GAD) which was due to look at life expectancy and what percentage of people’s lives they would spend in retirement, therefore being more facts and figures based rather than taking into account other factors. The two reports will be taken into consideration by the government in any future legislative change in State Pension ages.
The benchmark guide that was used for both reports was the supposition that people should spend up to one third of their lives in retirement and with the increase in life expectancy this would obviously mean an increase in the State Pension age at some point. However, in order to decide on that point, various assumptions and predictions in life expectancy over the current decades would need to be made.
According to the State Pension age timetable issued by the Department for Work and Pensions in 2013:
The Government is not planning to revise the existing timetables for the equalisation of State Pension age to 65 or the rise in the State Pension age to 66 or 67. However the timetable for the increase in the State Pension age from 67 to 68 could change as a result of the review.
This means that anyone born before 6 March 1961 will not have their State Pension age changed any further. Anyone born after this date (as long as they are given at least 10 years notice) could have their retirement age increased. So any changes will only affect those retiring after 2028 at the earliest (but this is unlikely to be until much later according to the Cridland report).
The Cridland report advises that the increase in State Pension age from 67 to 68 is brought forward to 2037-39. Currently legislation is in place for the retirement age to be increased to 68 for those who were born after 5 April 1977 with a staggered increase from 67 to 68 for those born between 6 April 1977 and 5th April 1978.
With the changes proposed in the Cridland report this may now apply to people who were born after 1971 with a possible staggered increase for those born between 1970 and 1971*. So those people who are currently in their late 40s or below may be affected by an increase in their State Pension age.
The report also advises that further increases to the State Pension age are only effected no more often than every 10 years.
The report from the GAD proposes even earlier increases to the State Pension age and in theory the increase could happen at any time after 2028 but this is less likely to happen (we hope). The GAD report also proposes that anyone aged 30 or below (i.e. those born after 1988 as legislation will likely not happen or at least come into force next year) should have a State pension age of 70. With life expectancy increases this proposal could indeed become a reality, if not now, then possibly at a later date.
Summary
So if you are wondering if you are affected by the proposal in increases to the State Pension age then you may well be affected if you were born after 6th April 1970 and it is possible (but we believe much less likely) you will be affected if you were born after 5th April 1961.
However, these are currently just proposals and the government will need to review both reports and decide on any changes they wish to make before introducing any legislation which will likely not be law until at least 2018.
There will be another review of State Pension ages due in 2023 and so it is possible that any further changes to the State Pension age that go beyond age 68 will not be made until after this review when more recent figures on life expectancy are available.
In the past the previous chancellor, George Osborne, stated that the plan was for the earliest age that you could draw your benefits from your personal pension would be 10 years lower than the State pension age at that point in time.
However, the only legislation that is in force currently is to say that the minimum age for taking personal pension benefits is 55 and no further increases to the personal pension retirement ages have actually been set in stone.
But, that is not to say that this will not happen some time in the near future to keep personal pension retirement ages in line with those of the state pension (minus 10 years). In fact the Treasury has confirmed that it will push ahead with the changes to personal pension retirement ages and add them in to future legislation to keep them in line with state pension ages.
What this means in practice is that anyone who was born in 1971 may have the minimum age at which they can take their personal pension changed to 57. This is because the first date at which the State pension age changes to 67 is in 2028 and at that time, if they changed the personal pension age to 57, that would be for people who were born in 1971. So if you were born before 1971 then hopefully none of the changes will affect you.
So there is a group of people, if that is the case, whose state pension age is 67 but who may still be able to take their personal pension at age 55. These are the people who are born between 1961 and 1971.
However, as we say, all this is hypothetical until more legislation is enacted!
In March 2016 John Cridland CBE started a review of state pension ages for those people who would be retiring after April 2028. The review was required by the 2014 Pensions Act which said that state pension ages would be reviewed in each parliament session and this one was the first. As state pension ages for those retiring before 2028 are already set in law, there was no scope for any changes for those people.
Anyone whose retirement age falls before April 2028 will not be affected by any changes that may be proposed in this review, but those retiring after that date may see an increase in their retirement age.
In October 2016 Mr Cridland released an interim review document which called for the views of public and representative bodies so that they can have their input into the future of the state pension and how and when it is paid. The consultation period lasts until the end of December 2016.
The interim review is set to be forward looking in terms of the situation of future retirees, the change in demographics predicted in the future and in particular whether state pension age should be more flexible rather than at a fixed date for each person.
Those who are part of Generation X are most likely to be affected by the review of state pension ages.
The review separated people into 3 generations – Baby Boomers (born 1945-65), Generation X (born 1966-1979) and Generation Y (born 1980-2000). It is most likely that those who fall into the Generation X category will be more likely to be affected by this review as they will be the ones whose retirement age falls first in terms of those affected, and those who have the shortest amount of time to make any changes that they may need to with regard to retirement planning.
The terms of reference of the review meant that it needed to consider the three key pillars of Affordability, Fairness and Fuller Working Lives.
In terms of affordability, simply looked at, the state pension is paid for by the people who are working at that time and so the relationship between the number of working people to the number of retired people needs to be taken into account to assess the affordability (amongst other factors).
Fairness is in reference to the fairness of the amount of state pension paid to different generations, i.e. perhaps some people will consider that they are receiving less pension than their parents or grandparents, having paid in the same amount.
In taking into account fuller working lives, this should enable people to work longer, as the level of health and fitness of people increases compared to older generations at the same age.
Another key factor that we have posted about before is the fact that life expectancy is increasing which obviously means that if pensions were paid from the same date that they would need to be paid for longer and this would be more expensive. Part of the governments proposals on state pension ages was that it was expected that people would spend around a third of their working lives in retirement and obviously if life expectancy increases, this is likely to increase retirement ages when you take that into account.
The review is also looking in particular at those who may be most impacted – carers, the self-employed and people with disabilities who may find it hard to build up their own private pension and emphasis was put on getting feedback from those groups of people.
The review will conclude by May 2017 and it could be expected that we may see some more changes in retirement ages set out in legislation after that.
Generation Y
If the above question applies to you then then the answer to this question is a bit up in the air. According to the Pensions Act 2007 (which is currently the most recent legislation on State Pension age), there was a difference for those who were born before 6th April 1978 and those who were born on or after that date. 
For anyone who is keeping an eye on the State Pension age review they will be interested to hear that John Cridland’s report on the Review in State Pension Ages was published today by the government. The Pensions Act 2014 requires that State Pension ages are reviewed in every parliament and this review was due to report by May 2017.