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State Pension Age Rise Brought Forward

Aged between 39 and 47? Prepare to work a year longer before you can claim your State Pension

Emma Wall 19 July, 2017 | 3:18PM

Britons aged between 39 and 47 will have to wait an extra year before they can claim their State Pension. The Government has today confirmed that the UK State Pension age will be brought forward by seven years to 2037. This means that for those aged between 39 and 47 they will have to wait until they are 68 to claim the new flat rate State Pension – currently £155 a week for those who qualify, or around £8,000 a year.

The announcement came from the Department of Work and Pensions, delivered by the Secretary of State for Work and Pensions MP David Gauke.

“I want Britain to be the best country in the world in which to grow old, where everyone enjoys the dignity and security they deserve in retirement,” he said. “Since 1948 the State Pension has been an important part of society, providing financial security to all in later life. As life expectancy continues to rise and the number of people in receipt of State Pension increases, we need to ensure that we have a fair and sustainable system that is reflective of modern life and protected for future generations.”

Gauke also referenced the pension freedoms and auto-enrolment initiatives introduced in recent years to boost saving into private pensions.

He continued: “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.”

The statement from the DWP explained that when the State Pension was introduced in 1948, a 65-year-old could expect to live another 13.5 years. Now, a 65-year-old has a life expectancy of 22.8 years, and the State Pension age should reflect this change.

Caroline Abrahams, Charity Director at Age UK, said in bringing forward a rise in State Pension age by seven years, the Government was “picking the pockets of everyone in their late forties and younger”.

She continued: “It is astonishing that this is being announced the day after new authoritative research suggested that the long-term improvement in life expectancy is stalling. For people in midlife and younger their State Pension may seem a lifetime away but the fact is that the change announced today will have a real impact on them later in life.”

Flat Rate State Pension

The flat rate State Pension was introduced last April, billed as a cure-all for the complicated top-up system; a fair, generous replacement for the out-going two-tier State Pension.

However there has been some criticism of the new pension, as currently only 13% of people reaching State Pension age in the last 12 months qualified for the full flat rate of £155.65 a week. Pensioners with fewer than 10 qualifying years of National Insurance Contributions (NICs) will see their weekly State Pension income fall in comparison with the existing system from Wednesday, as will those who relied on spousal contributions.

 

 

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About Author Emma Wall

Emma Wall  is Senior Editor for Morningstar.co.uk