State Pension Age The information is from a survey by Just Group called Countdown to Retirement. The survey discovered that nearly two-thirds of people over 55 stopped working before turning 66, the retirement age. Out of 1,050 participants, over 60% retired before getting their state pension. Some retired right when they got the pension, others later. Men tended to retire earlier than women (69% vs. 55%). Around a third who retired early also took money from their pension between 55 and retirement. Concerns were raised about the sustainability of withdrawals as data showed many taking out high percentages annually.
State Pension Age Changes
The State Pension Age has been adjusted by the government, leading to a gradual increase from 65 to 68 for both men and women. This shift reflects the trend of people living longer, resulting in a lower age for pension eligibility. Changes in the eligibility for Pension Credit and other pension benefits are influenced by these adjustments. Studies indicate that due to rising life expectancy and decreasing birth rates, middle-aged workers in the UK may have to wait until they reach 71 years of age before retiring.
What is State Pension?
The UK’s state pension age will incrementally increase from 66 to 67 starting in April 2026. Eligibility for payments from a government fund, funded by taxpayers, is dependent on reaching a certain age and making national insurance contributions. This constitutes the public pension scheme. Typically, pensioners receive these benefits every four weeks. It is advisable to consider establishing a personal pension in addition to the state pension, as the latter may not suffice for a comfortable retirement.
What Are the Age Eligibility Changes in year 2024?
Upon reaching state pension age, individuals qualify for the state pension, which is currently set at 66 years for both genders. The state pension age was raised to 66 in 2020, with the next increase expected to occur between 2026 and 2028, bringing it to 67 years. Individuals born after April 1960 will be impacted by this change. Legislation indicates that the state pension eligibility age will rise once more to 68 in 2044 or 2046, affecting those born after April 1977. Experts suggest that due to a significant number of individuals exiting the workforce prematurely, often due to preventable health issues, there may be a need to further increase this age threshold.
State Pension Age Increase Reason
The state pension age is adjusted every six years to reflect workforce changes and types of employment. Due to periodic reviews, the State Pension age may change again in the future, influenced by factors such as life expectancy shifts. Improved working and healthcare conditions have led to an increase in life expectancy in the UK over the past forty years. Raising the eligibility age for benefits is one way the government can manage costs as the number of people above state pension age grows. Balancing taxpayers’ interests with ensuring most individuals live long enough to receive a state pension is crucial for the government.
State Pension Age Amount 2024
Your State Pension will receive an increase in April 2024 due to the government maintaining the triple lock. This increase, the second-largest in history, will be 8.5% to align with the average wage growth between May and July 2023. Individuals eligible for the basic State Pension or the flat-rate State Pension introduced in April 2016 will benefit from this raise reaffirmed in the recent Autumn Statement.
Individuals who qualify for the full new State Pension will now receive a weekly payment of £221.20, which is an increase from £203.85. Moreover, those on the older basic State Pension, who reached State Pension age before April 2016, will see their payment rise to £169.50 from £156.20.
HIGH LEVELS OF EARLY PENSION ACCESS
Stephen Lowe, who works at Just Group, mentioned that many retire before getting state pension. This creates financial pressure as they need to cover the income gap until they receive the state pension. Their survey showed that 28% access their pension early, especially if retiring before state pension age. People using income drawdown often withdraw over 6% yearly, higher than recommended rates, raising concerns about pension sustainability. They advise seeking advice before making irreversible decisions about pensions, suggesting consulting a financial adviser or using services like Pension Wise for guidance.
