New Review of State Pension Ages
On 1 March 2016 the government instigated a new review of State Pension Ages for anyone retiring after April 2028. Currently anyone born between April 1961 and March 1977 has a retirement age of 67 so this may mean that any changes that the review brings up will affect anyone born after April 1961 and may increase their retirement age further.
Those born after March 1977 currently have a retirement age of 68 and so it is possible that this will be increased or else it is possible that a further age group is going to be given a higher retirement age. For the first time it might even be possible that a State Pension Age of 70 is introduced for those who are pretty young at the moment.
The purpose of the review is state as follows:
The purpose of the independent review of State Pension age is to make recommendations to the Secretary of State for Work and Pensions on future State Pension age arrangements. These recommendations should be affordable in the long term, fair to current and future generations of pensioners, and consistent with supporting fuller working lives.
The implications of this are that the State Pension Age will indeed be increased which would allow for longer working lives and also reduce the burden on the taxpayers as they are the ones that actually pay for the pensions in payment (as the system works on a Pay As You Go basis).
The review will be considering:
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What a suitable State Pension age is, in the immediate future and over the longer term;
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Whether the current system of a universal State Pension age rising in line with life expectancy best supports affordability, fairness, and fuller working lives objectives;
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And, if not, how State Pension age arrangements might better support these objectives.
The review will consult with relevant parties and will come up with its findings by January 2017, so there is a while to go before any changes are announced and after this, legislation will need to be put in place for any of those changes to apply. this gives just over a year for that to happen as anyone affected by those changes needs to be given at least 10 years notice of changes to their State Pension Age, so they will need to be notified by 2018.
The review of state pension ages is an ongoing procedure and this will not be the last one. In fact the 2014 Pensions Act requires the State Pension age to be reviewed during each Parliament. This review is being undertaken by an independent appointee, namely John Cridland CBE who was most recently Director General of the Confederation of British Industry (CBI). He is currently Chair of the Board of Transport for the North. He has previously helped to negotiate the UK’s first national minimum wage, spent 10 years on the Low Pay Commission and he was also a member of the Advisory, Conciliation and Arbitration Service (ACAS).