If you are already making plans for your retirement, the recent stories in the news may be worrying. However, you need to know that the idea of increasing the State Pension age to 75 was only a proposal. The UK government is not actually taking this action. This article will tell you everything you need to know about the current plan for State Pensions.
Why do people think the State Pension age is going up to 75?
The sudden controversy over the State Pension age was a result of a report from the Centre for Social Justice. This is the think tank which came up with the idea for Universal Credit, which has hardly been a success. Understandably, people have been reacting to the CSJ proposals to raise the State Pension age to 75 with alarm. The CSJ suggests that the UK government should increase the State Pension age to 70 by 2028 and then up to 75 by 2035. This would apply for all genders. Following the outcry against the CSJ proposals, the Department for Work and Pensions stated that the UK government did not have any plans to carry out these changes. With the increases to life expectancy since the introduction of the State Pension, the CSJ has concerns about the cost of benefits for the ageing population. However, the UK government won’t be making such drastic increases to the State Pension age or at least isn’t planning on it.
What would happen if the State Pension age became 75?
The CSJ claims that increasing the State Pension age would be beneficial because working longer improves health and wellbeing. Many people are openly disagreeing with this, as there are plenty of jobs which they would not be able to continue doing in their 70s. This includes teachers, builders, nurses, social workers, firefighters, prison officers, paramedics, and musicians or dancers to name just a few professions. Mentally and physically demanding jobs just aren’t realistic for elderly people to be able to do. In some poorer areas of the UK, life expectancy is below 75 anyway. This means that working-class people would likely have to work right up until they die, without getting to benefit from their pension at all. It is clearly unfair, which the UK government claims to understand, so they do not intend to follow the CSJ’s recommendations in this case. Many women, in particular, have already suffered from the previous changes to their State Pension age. If this plan did come into effect, then people would not have enough warning to prepare for up to nine more years in employment. Age discrimination is already very common, with people in their 50s finding it difficult to get a job even if they’re healthy.
What is actually happening to the State Pension age?
To clear up any confusion, here is what is actually happening to the State Pension age according to current government plans. The State Pension will increase to 66 in October 2020. Then it will rise again to 67 between 2026-2028. The government plans to increase it once again to 68 by 2044-2046. However, they have previously stated that this third increase could be brought forward to 2037-2039. At the moment, the general population in the UK is not very knowledgeable about pensions and saving for their retirement. The best way to avoid financial difficulties, no matter what happens with the State Pension age, is to educate yourself about pension rules and save privately as well. You can use this tool on the government website to check your State Pension age. It should also tell you when you will be eligible for Pension Credit. You can also calculate the amount that you should get for your State Pension and your options for increasing it.