Latest news with #PensionsCommission
Daily Mirror
17 hours ago
- Business
- Daily Mirror
Exact age you can get your state pension as millions set to work for longer
The state pension age is the earliest you can start claiming the state pension and it is separate to any workplace or private pension you may have The state pension age is set to start rising again from next year - so how old exactly will you be when you can start claiming it? The state pension age for men and women is currently 66 - but this is set to rise to 67 between 2026 and 2028. The first people to see their state pension age increase are those born between April 6, 1960 and May 5, 1960. If you are born between these dates, you won't be able to start claiming your state pension until you are age 66 and one month. The age will gradually keep increasing over the following year until the state pension age hits 67. Those born from April 1977 onwards are currently set to see their state pension age rise to 68. There have been calls to bring this forward, but a decision on this has been delayed. It comes after a major review into pension saving was announced this week, amid fears that today's workers face a greater risk of poverty in retirement. Work and Pensions Secretary Liz Kendall will revive the Pensions Commission, which last met in 2006, to look at ways to encourage workers to save more money for their retirement. Get the best deals and tips from Mirror Money WHATSAPP GROUP: Get money news and top deals straight to your phone by joining our Money WhatsApp group here. We also treat our community members to special offers, promotions, and adverts from us and our partners. If you don't like our community, you can check out any time you like. If you're curious, you can read our Privacy Notice. State pension age rising - see when you can retire The following timetable shows your date and birth and the age you will be when you can claim your state pension. It was published with the Pensions Act 2014. April 6, 1960 – May 5, 1960 - 66 years and 1 month May 6, 1960 – June 5, 1960 - 66 years and 2 months June 6, 1960 – July 5, 1960 - 66 years and 3 months July 6, 1960 – August 5, 1960 - 66 years and 4 months August 6, 1960 – September 5, 1960 - 66 years and 5 months September 6, 1960 – October 5, 1960 - 66 years and 6 months October 6, 1960 – November 5, 1960 - 66 years and 7 months November 6, 1960 – December 5, 1960 - 66 years and 8 months December 6, 1960 – January 5, 1961 - 66 years and 9 months January 6, 1961 – February 5, 1961 - 66 years and 10 months February 6, 1961 – March 5, 1961 - 66 years and 11 months March 6, 1961 – April 5, 1977 You can check your state pension age on by entering your date of birth. The state pension age is the earliest you can start claiming the state pension. It is separate to any workplace or private pension you may have. The earliest age you can access your private pensions is currently 55 - but this will rise to 57 from April 2028. Anyone retiring now will claim the new state pension, which is worth £221.20 a week if you're eligible for the full amount. Most people need 35 qualifying years on their National Insurance record to get the full amount. The state pension rises every year in line with the triple lock promise. Your state pension is separate to any private or workplace pension you may have.
The Independent
2 days ago
- Business
- The Independent
Business news live: Mortgage rules changed immediately and FTSE 100 starts above key threshold
A major change is incoming in the pensions world, with the government set to make changes including the retirement age, but also with a Pensions Commission to look at contribution rates to stave off the growing threat of people not having enough money for retirement. Now on Tuesday, the FCA has also announced an immediate change to mortgage rules, to help borrowers reduce their repayment term lengths, save money and find cheaper products with other providers more easily. The FCA say this will 'help people navigate their financial lives and support growth' in future, with other changes looking at making it easier for first-time buyers to get on the ladder. In stock markets, the FTSE 100 closed above 9,000 points on Monday as global indices continued to push toward record new levels. Bitcoin has meanwhile remained around $118,000 and Brent Crude Oil is back under $69 after rising before the weekend.
Telegraph
2 days ago
- Business
- Telegraph
Labour must scrap higher-rate tax relief to solve Britain's retirement crisis
The Government has just announced a new 'Pensions Commission' to build on pension 'auto-enrolment', widely seen as one of the UK's real public policy success stories. Since auto-enrolment was introduced in 2012, all employers must offer a pension and enrol eligible staff unless they opt out. Over nine million more people are now saving (mostly) modest amounts for their pension – the minimum employee contribution is 5pc and 3pc for employers – with a low level of opt-out. Pension tax breaks – the only 'magic' in pensions – certainly work well for 40pc taxpayers, but do little for 20pc taxpayers, earning up to roughly £50,000. Although pension contributions are tax deductible, pensions are taxed, so the only real freebie is the tax-free 25pc cash lump sum. This reduces the retirement tax rate for 20pc taxpayers to 15pc, and end-to-end, their tax gain is only 6pc of the amount saved. Higher-rate taxpayers do much better – their end-to-end tax gain is 17pc of the amount saved. The big winners are those paying 40pc tax in work, but only 20pc in retirement – their end-to-end gain is a whopping 40pc of the amount saved. But it's a big leap of faith to believe the tax-free lump sum won't be reduced, or even scrapped altogether, over the next few decades. And, anyway, this tax freebie is really just a payment for locking up your money for 30 or 40 years, with no way to get your hands on it. The economic cost of losing this flexibility is high, especially for lower earners with little or no ready savings. For the many 20pc taxpayers saving into a pension, but also going into debt to pay their bills today, the high interest rates on credit cards or overdrafts completely overwhelm their tax benefit. Pension saving costs them real money. For very low earners – currently you have to earning more than £10,000 to be auto-enrolled – saving for a bigger pension may be money down the drain if it makes them ineligible for means-tested benefits in retirement. Lack of flexibility also goes for the self-employed, a group the Government wants to get saving more in their pension. But with fluctuating annual earnings, many self-employed workers need to be able to get their hands on their savings, and don't want it locked away for many years in a pension. At the moment, if people choose to opt out of auto-enrolment, their overall pay and pension contributions go down, because they lose the employer contribution. It is standard practice for company directors to be offered a higher salary for giving up the employer pension contribution. This should be extended to all staff. Everyone should be able to take cash instead of a pension contribution. Pension tax should also be changed to tilt things from 40pc to 20pc taxpayers, encouraging them to save for a half-decent retirement. This means moving to a flat rate of tax relief for all pension savings – which Rachel Reeves backed in 2016 – set to be cost neutral for the Treasury at, say, 30pc. A flat-rate is fundamentally fair – everyone gets the same tax top-up for each pension pound saved. It also encourages the lower paid to save more, and helps close the gender pension gap, which sees men, on average, receive much higher pension income than women. However, while there are many clever ideas the new Pensions Commission comes up with, it has very few practical options. People will have to work longer, save more and have a poorer retirement – that's not exactly a vote winning slogan. Sooner or later, higher pensions mean higher employee and employer contributions, which must be largely paid for by lower wages today. But the Government has already said higher contributions won't happen before 2029, and we can guarantee it will be deferred beyond this – that's exactly what happened when auto-enrolment was originally introduced. And despite all the other pension tub-thumping from the Government, the answer is not to hold more risky private assets, with a higher expected return, but guaranteed higher fees. Nor is it to push so-called 'collective defined contribution' pensions, which are, at best, an intergenerational Ponzi scheme. Fortunately, people in taxpayer-guaranteed public sector pension schemes can forget about 'pension adequacy'. A civil servant who started in 2015 retiring with 42 years service will receive an inflation-linked pension equal to their average salary. That will give the kind of retirement lifestyle someone with an auto-enrolment pension can only dream of.
Yahoo
2 days ago
- Business
- Yahoo
Are you worried about being worse off in retirement than pensioners today? Have your say
Pensioners in 2050 are on track to be £800 worse off per year than those retiring today, the UK's Department for Work and Pensions (DWP) has said. The DWP said on Monday that an analysis showed four in 10, or nearly 15 million people, were under saving for retirement. In fact, 45% of working age adults are saving nothing at all into a pension, the DWP said, highlighting that lower earners, the self-employed and some ethnic minorities were particularly at risk. Indeed, more than three million self-employed workers are not saving into a pension, while just a quarter of low earners in the private sector are doing so. The DWP also said that just a quarter of people from a Pakistani or Bangladeshi background are saving into a pension. In addition, it added that the new analysis revealed a "stark" 48% gender gap in private pensions wealth. It said that a woman currently approaching retirement could typically expect to have private pension income worth over £5,000 less than that of a typical man. The findings came in an announcement on Monday that government was reviving the Pensions Commission to "examine why tomorrow's pensioners are on track to be poorer than today's and make recommendations for change". Read more: How to build passive income The Pensions Commission was a body originally set up in 2002 under the government of then-Labour prime minister Tony Blair. The commission last met in 2006 and its work led to the rollout of auto-enrolment into pension saving, which began in 2012. This policy has meant that 88% of eligible employees are now saving into a pension, up from 55% in 2012. The DWP said that the relaunched Pensions Commission will "explore the complex barriers stopping people from saving enough for retirement", with its final report due out in 2027. UK work and pensions secretary Liz Kendall said: "People deserve to know that they will have a decent income in retirement – with all the security, dignity and freedom that brings. But the truth is, that is not the reality facing many people, especially if you're low paid, or self-employed. "The Pensions Commission laid the groundwork, and now, two decades later, we are reviving it to tackle the barriers that stop too many saving in the first place." Jordan Clark, financial planner at Quilter, said: "People need to make sure they plan their finances before it is too late and give themselves enough time to rectify potential missed opportunities and mistakes from the past. Clearly there is a desire from people to glide smoothly into retirement, but without a pension pot set up to do this, it simply won't be possible." "The working-age population needs to be prepared to work later into life, with adequate private pension provision being the only route to avoiding this. There is a real need for bold and innovative solutions to the problems faced, and arguably speed is of the essence." Are you concerned about being worse off in retirement than pensioners today? Vote in the poll below. Yahoo UK's poll of the week lets you vote and indicate your strength of feeling on one of the week's hot topics. After the poll closes, we'll publish and analyse the results each Friday, giving readers the chance to see how polarising a topic has become and if their view chimes with other Yahoo UK readers. Read more: Stocks to watch this week: Tesla, Alphabet, Intel, Lloyds and JD Wetherspoon Average UK house asking price drops by almost £5,000 Jobs data increases odds on Bank of England interest rate cut
The Independent
2 days ago
- Business
- The Independent
Pensions aren't working – Labour is right to grasp the nettle
Put simply, unless we act, tomorrow's pensioners will be poorer than today's, because people who are saving aren't saving enough for their retirement. And crucially, because almost half of the working-age population isn't saving anything for their retirement at all.' It's fair to say that the secretary of state for work and pensions, Liz Kendall, has had a challenging time of it since she took her first ministerial job a little more than a year ago. But that doesn't mean that everything she says is wrong – or that every initiative she takes should be doomed. On pensions, she seems determined to make sure she's not forced by the Treasury into another precipitate and politically disastrous move before first winning the arguments on reform, not least within her own party. State and private pensions are ripe for further restructuring, as is the wider social security system, and the country cannot afford another debacle on the scale of the recent welfare reform bill. Neither can Ms Kendall, or her impatient colleague, the chancellor. Fortunately for the government, much of the background work was completed some years ago, and the machinery to reshape policy is available 'off the shelf'. The Pensions Commission, which last reported in 2006, was a rare success in that many of its recommendations were actually implemented and proved to be highly successful. Now, for example, some 88 per cent of workers are auto-enrolled into a private pension, with at least 3 per cent of their salary paid by their employer into an approved scheme. The result is a widespread, but still inadequate, building-up of private pension provision. Not enough is being put aside for old age and infirmity, particularly by younger workers – who, tragically, have the most time on their side to make their savings grow – and the self-employed. The UK, post-Brexit and in a more unstable world, is hampered by low investment, sluggish productivity growth, an expensive national debt, and a seemingly intractable cost-of-living crisis. As Ms Kendall points out, the triple lock – which guarantees that the state pension rises in line with inflation, or wage increases, or by 2.5 per cent, whichever is the greatest – costs some £31bn a year; even if this figure stabilises as inflation subsides, an ageing population, living longer but in poorer health, will push the overall cost of state retirement age benefits well beyond the current figure of about £140bn a year, or 5 per cent of GDP. Given that these benefits constitute by far the largest component of the total social security bill, welfare reform is impossible without some way of putting them on a more sustainable footing. To the dismay of some, Ms Kendall has taken one immediate step in that direction by bringing forward the next statutory review of the state retirement age, which has already been raised by successive governments. While natural justice and practicalities will protect many who are now in their sixties, for those currently in their forties and fifties, facing further postponements in their state pension eligibility is akin to chasing the proverbial pot of gold at the end of the rainbow (and it's not that golden, either). It is true that life expectancy nowadays is far higher than when the Liberal chancellor David Lloyd George established the state pension in 1908 – it now stands at 82 years, against 52 in the Edwardian era – but no one can make sensible provision for their retirement if their state entitlement keeps disappearing over the horizon. If it is to be raised – perhaps to 70 or so – to take account of (sometimes expensive) advances in healthcare and a changing society, then it should be kept there permanently. There is, therefore, much for Ms Kendall and the Pensions Commission to do – especially in making the country, and particularly the parliamentary Labour Party, face up to those 'tough choices' that politicians themselves so often talk about but ultimately duck. Policy must be evidence based, and thus persuasive, and the commission will help with that. One thing that would be highly perverse in this context would be for the chancellor to attack savings, and tax pension pots, in her next Budget. Rachel Reeves herself has spoken of the imperative to increase investment by pension funds in productive infrastructure schemes. It would hardly be sensible, then, to start taxing them even more heavily, or to force them into unsuitable or risky pet infrastructure projects that will leave pensioners shortchanged. The updated strategy for pensions, both state and private, will also need to be meshed with whatever reforms to the way we pay for social care eventually emerge from the Casey Review, commissioned by Wes Streeting. Younger folk have more than enough to deal with today, and find saving difficult. Yet one distant day, when they are too old or sick to work – unlikely as it may seem now – they might be grateful that Ms Kendall, otherwise long forgotten, put provisions in place to make their lives a little easier.
