Latest news with #state pension
Daily Mail
2 days ago
- Business
- Daily Mail
When will you be able to retire... and will it be with a state pension?
A stark warning has been sounded that the state pension age could have to rise to 74 for those under-30s. The Institute for Fiscal Studies' pronouncement in the same week that the government announced a state pension review set the cat amongst the pensions. But would Labour - or any party - really hike the state pension age that high? Wouldn't it be political suicide and spark protests in the street? The IFS warning hinged around the triple lock and balancing the books, but it's clear that the risk of the state pension age rising from its current timetable's maximum 68 is high. On this episode of the This is Money podcast, Georgie Frost, Helen Crane and Simon Lambert, discuss what could happen to the state pension, when we might be able to retire and what we all need to do to get there. Pension saving is also under the spotlight and the team discuss how to make the most of your work scheme or a Sipp. Plus, a double tax hit on inheritances is on the way, as pensions are pulled into the net. Does the government need to change tack rather than plough on with a levy that will reach 64 per cent for many affected? The FTSE 100 finally broke through 9,000 this week, is 10,000 on the cards and why is the UK stock market doing well? And finally, buy and hold is the traditional investment mantra, so why does one bitcoin expert say you shouldn't do that and should trade it instead? Listen to the This is Money podcast We publish the podcast every Friday on This is Money and at Apple Podcasts, Spotify, Amazon Music and more. Search for it at your favourite podcast platform. To download Apple Podcasts go to the App store. On Android devices, go to the Google Play store to download the podcast app of your choice. You can press play to listen to this week's full episode on the player above, and wherever you get your podcasts please subscribe and review us if you like the podcast. You can also listen to the latest episode, find the archive and join in the debate in reader comments on the This is Money podcast page.
The Sun
3 days ago
- Business
- The Sun
Are you on the state pension cliff edge and is the triple lock safe? Experts reveal what YOU need to do
MILLIONS of Brits could work for longer after the government announced a review of the state pension age this week. Chancellor Rachel Reeves says a review is needed to keep the state pension system 'sustainable and affordable'. 5 The current State Pension costs the Treasury around £125 billion a year – and it's only going to go up as we all live longer. The triple lock promise, which guarantees that the state pension increases in line with inflation, wages or 2.5%, is expected to hit £15.5billion a year by 2030. Blathnaid Corless and Ruth Jackson-Kirby explains what is happening and what YOU should do now. What is happening? The state pension age - when you can start claiming - is currently 66. It is rising to 67 by 2028 and 68 by 2046. A new review means the rise could be accelerated and the state pension age could even rise to 69 or 70. The government reviews the state pension age every six years and the next review was due in 2029 - but will now come in 2027. Rachel Vahey, head of public policy at AJ Bell, said: "An increase to the state pension age from 66 to 67 is already slated to happen between 2026 and 2028. "But it's less clear what will happen after that. "There is also an increase to age 68 pencilled in for 2046, but a faster increase is definitely on the cards. "The first two reviews of the state pension age advocated bringing this forward, but successive governments have treated the issue like a hot potato." The government has also asked the Pensions Commission to tackle a savings crisis faced by retirees, including how much is saved via minimum auto-enrollment contributions and how to help self-employed people. Hargreaves Lansdown head of retirement Helen Morrissey, said: 'The concern is that many people are not saving enough and risk not having enough in retirement.' When will I get the state pension? The big question is whether the move to a state pension age of 68 will be brought forward. Any changes could mean people in their mid-50s being left facing a gap between when they planned to retire and when they can start claiming their state pension. For anyone under 55, it means that you will have to factor in working longer into your retirement plan. 5 Former pensions minister and LCP partner Steve Webb said: 'The most likely change in the short to medium term is getting to 68 sooner, as this has been recommended by two previous reviews of state pension age.' A previous review, called the Cridland Review, recommended that the rise to 68 should be brought forward. Whatever happens the government must give at least 10 years notice of any increase to the state pension age. If the state pension age rises to 68 earlier than planned, people born in the early 1970s could lose out on £17,340, based on the state pension rising 2.5 per cent each year, according to AJ Bell. You can see when you will get the state pension as planned by using our Sun Club tool at 'We're relying on the pension... and now it's going to be pushed back and back' NICOLA Jones, 58, gave up her job as a mental health worker last year to become a full-time carer for her partner Tracy, 54, who has MS. The couple say they're very worried about potential changes to the state pension age, which they're hoping will ease the financial strain of living solely off benefits including Universal Credit and Carer's Allowance, which give them a joint monthly income of £1118.67. While Nicola will not be affected by the predicted changes, Tracy probably will. 'We're on the bread line as it is because I'm a full time carer and we have no savings. We keep hearing that people should be saving towards their pension, but we can't do that,' Nicola said. 'We're really struggling as it is, and we would rely on the pension coming in and just easing our life really and just making it less stressful, and now it's going to get pushed back and back - I mean, I've heard it could be going up to 70.' Is the triple lock safe? Raising the state pension age isn't the only way the government could cut its retirement bill - it could look at the triple lock. It has been a brilliant support to pensioners against inflation but at a huge cost to government finances. The government has ruled out axing the triple lock guarantee before the end of the current Parliament, which will be in July 2029 at the latest. Ms Morrisey said: 'Over the longer term we may well see the triple lock evolve - one option could be for it to move towards being a double lock instead.' Calum Cooper, head of Pensions Policy Innovation at Hymans Robertson, said: 'We estimate it should be replaced in the 2030s – it's a question of when, not if.' Another option could be looking at making it means tested - but this is unlikely, suggests Steve Webb. But he adds: 'Other changes could include increasing the number of years of contributions needed for a full pension'. At present you need 35 years to get the full state pension. 5 Is your pension about to be taxed? Another problem facing future pensioners is tax. You can earn up to £12,570 before you have to start paying income tax. That's your Personal Allowance. The full state pension is £11,973 a year – just £597 below that threshold. With the Personal Allowance frozen until at least 2028 millions of pensioners are heading towards paying tax on a state benefit. It's a looming political disaster that any government will want to avoid. What should you do now? The planned shake-up to rules shows that 'relying on the state pension alone for your retirement income is risky', says Rachel Vahey. 'If you're forced to wait a year or two to claim it, you'll either need to work longer or find tens of thousands of pounds extra from your pension and private savings to plug the gap,' she adds. If you're approaching retirement and concerned about your savings, she suggests downsizing your home to free up cash, or moving into another job, possibly part-time. 'The best way to give yourself freedom to retire on your own terms is to build up your private pension pot,' she says. Even if you're not yet approaching retirement, you should keep an eye on your pension savings so you know what you're on track to receive and can work out if you need to increase your contributions, Ms Morrisey added. 'Taking small steps like increasing your contribution to your private pension every time you get a pay increase or new role can make a big difference to what you end up with in retirement.' You should also make sure you haven't lost track of any old pensions from previous jobs, as you could be missing out on thousands of pounds. If you have lost track of a pension, you can use the government's pension tracing service to track it down, either by phone or at You can also use Gretel, a free online service that takes minutes to sign up. 'Once you've got a true idea of how much you have saved then you can make a plan to move towards the kind of retirement you want,' Ms Morrisey adds. For a single person looking for a 'moderate retirement' later in life, which would allow you to have a two-week holiday in Europe, a long weekend break in the UK, some eating out, as well as the ability to run a small car, you'll need to have a single annual income of £26,129, according to Hargreaves Lansdown. The State Pension isn't going to disappear or change overnight but pressure is building, and the current benefit is unsustainable. 'There's no doubt that making sure you have a good private pension is the best protection against future changes which make the state pension less generous,' concludes Webb. How does the state pension work? AT the moment the current state pension is paid to both men and women from age 66 - but it's due to rise to 67 by 2028 and 68 by 2046. The state pension is a recurring payment from the government most Brits start getting when they reach State Pension age. But not everyone gets the same amount, and you are awarded depending on your National Insurance record. For most pensioners, it forms only part of their retirement income, as they could have other pots from a workplace pension, earning and savings. The new state pension is based on people's National Insurance records. Workers must have 35 qualifying years of National Insurance to get the maximum amount of the new state pension. You earn National Insurance qualifying years through work, or by getting credits, for instance when you are looking after children and claiming child benefit. If you have gaps, you can top up your record by paying in voluntary National Insurance contributions. To get the old, full basic state pension, you will need 30 years of contributions or credits. You will need at least 10 years on your NI record to get any state pension.
Telegraph
4 days ago
- Business
- Telegraph
RMT union threatens strikes if Labour raises state pension age
A rail union boss has threatened to launch national strikes if Labour raises the state pension age. Eddie Dempsey, general secretary of the National Union of Rail, Maritime and Transport Workers (RMT), warned the Government he would 'lead our movement onto the streets and will not hesitate to protest nationally and take coordinated direct action'. His threat came after Labour opened the door for the statutory retirement age to be raised by announcing a new pensions review on Monday. The move, unveiled by Liz Kendall, the Work and Pensions Secretary, raises the prospect that six million Britons could be forced to delay their retirements. On Thursday, Mr Dempsey warned: 'If this Government makes any move to drastically increase the retirement age, we intend to lead our movement onto the streets and will not hesitate to protest nationally and take coordinated direct action. 'The UK state pension is already one of the worst in the entire developed world which is a direct result of decades of governments transferring both our national and personal wealth to the super rich. 'Any decision to squeeze more out of working people by forcing us to work even longer would be a national disgrace.' Instead of raising the state pension age, Mr Dempsey said the Government should impose a wealth tax on assets of over £2 million. Although the RMT is not formally affiliated to Labour, the union commands a largely public sector membership numbering around 83,000 people. Under current plans, the state pension age is on course to rise to 67 by 2028 and to 68 by 2046. However, raising the retirement age sooner than planned is politically controversial, with previous plans to do so abandoned by Jeremy Hunt, the former Chancellor, amid concerns he would struggle to justify the change. The RMT strike threat comes after Nigel Farage also backed Labour's suggestions that the state pension age must rise. The Reform UK leader said on Tuesday: 'I don't think we can really afford to [wait to the 2040s], to be frank. If there is a sudden economic miracle, then it might change that. But it does not look to be happening any time soon.' Ms Kendall said this week she was 'under no illusions' about the scale of the challenges facing both workers and the public purse as the country ages. 'Many workers are more concerned about putting food on the table and keeping a roof over their heads than saving for a retirement that seems a long way away, and many businesses face huge challenges in keeping profitable and flexible in an increasingly uncertain world,' she said.
Yahoo
6 days ago
- Business
- Yahoo
Should the state pension age be raised above 66? Have your say
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. A review into raising the state pension age is needed to ensure the system is "sustainable and affordable for generations to come", Rachel Reeves has said. Speaking to reporters on Tuesday, the chancellor said that as life expectancy increases, it is "right" to look at the age at which people can begin receiving their state pension. The state pension age is currently 66, rising to 67 by 2028, and to 68 between 2044 and 2046, although some have suggested this date could be brought forward. By the 2070s, the number of pensioners in the UK is expected to have increased by more than 50%, while the working age population will have only grown by around 10%, work and pensions secretary Liz Kendall said as she announced a separate review into pensions adequacy. This clearly puts pressure on the government, with the Treasury spending around £138bn on the state pension last year, equivalent to 5% of GDP. The Office for Budget Responsibility (OBR) expects this to rise to 7.7% by the early 2070s. Head of public policy at AJ Bell, Rachel Vahey, said an ageing population "places an increasing burden on taxpayers", and that while future governments may hope for an "improved economy and growing tax receipts", this "can't be guaranteed". The Institute for Fiscal Studies claimed increasing the state pension age is a "coherent response" to people living longer, but warned it "affects poorer people more, as well as those who find it more difficult to remain in paid work at older ages". It said any savings from delaying payouts should be "recycled into making universal credit more generous for those in the run-up to that age". Disabilities and caring responsibilities in older age, which could leave people unable to work, is also a consideration, with the International Longevity Centre UK noting that these factors "vary significantly by region and social class". But what do you think, is raising the state pension age inevitable? Or do you think the current level of 66 strikes a fair balance? Let us know in the polls below. The "elephant in the room", as Vahey describes it, is that the state pension age is "just one lever government has to help manage the cost of the state pension". The other is reforming the triple lock, a cast-iron guarantee that state pensions will rise every year by 2.5%, CPI inflation, or the rise in average earnings, whichever is highest. Yesterday Kendall said that the triple lock is "out of scope" of the newly resurrected Pensions Commission, which will be leading a review into the adequacy of the pensions system. Labour has already committed to keeping the triple lock, which first came into force in 2011, for the entirety of this Parliament. This puts considerable pressure on the Treasury's finances, however, with the OBR expecting the annual cost of this policy to reach £15.5bn by 2030. It said spending on the policy has risen by as much as three times the figure projected in 2012 and questioned whether taxpayers can realistically continue paying for it. 'The UK cannot afford the array of promises that it has made to the public,' the fiscal watchdog's chairman Richard Hughes said. It would be wrong to scrap the pensions triple lock to cover the cost of spiralling on fixed incomes shouldn't pay the price for a broken system. — Sir Alec Shelbrooke MP (@AlecShelbrooke) July 21, 2025 'Precisely what the government does in response to these pressures and the choices that ultimately every country is going to have to make about how they afford their welfare states and their wider public services commitments are issues for politicians.' However, supporters of the triple lock said it helps improve the adequacy of retirement incomes for current and future pensioners, particularly those on lower incomes. A Commons research briefing added that the UK state pension is "low in an international context", with separate Parliamentary figures showing an overall 55.4% replacement rate of pre-retirement earnings from mandatory pensions, compared to an average of 61.4% among similar economies. The government may have tied its hands for now on this issue, but Vahey said that if the newly announced review calls for the state pension age timetable to be accelerated, it "could provide some cover for future governments to look at reforming the triple lock" to avert more dramatic back on Friday to read the results and analysis via the link below. Read more of Yahoo UK's Poll of the Week articles
The Sun
6 days ago
- Business
- The Sun
How long you'll have to wait to get your state pension
MILLIONS of us may have to wait a little longer to get our state pension. The government has just kicked off a new review into the state pension age, which could mean the goalposts are about to shift. 2 Right now, the state pension age is 66. It's already planned to rise to 67 between 2026 and 2028, and then to 68 between 2044 and 2046. If you're 48 years and three months or younger, your state pension age will be 68. For those aged 64 to 65, the state pension age gradually increases from 66 to 67, depending on your exact age now. However, the latest review could mean the move to 68 happens sooner. Rachel Vahey, head of public policy at AJ Bell, said: "An increase to state pension age from 66 to 67 is already slated to happen between 2026 and 2028. "But it's less clear what will happen after that. "There is also an increase to age 68 pencilled in for 2046, but a faster increase is definitely on the cards. "The first two reviews of the state pension age advocated bringing this forward, but successive governments have treated the issue like a hot potato." So, what does this all mean for you and your retirement plans? How to track down lost pensions worth £1,000s Why is the state pension age being reviewed? The short answer is that we are, on average, living longer. Chancellor Rachel Reeves said a review is needed to keep the state pension system "sustainable and affordable" for everyone, now and in the future. The triple lock, which guarantees state pension increases in line with inflation, wages or 2.5%, has become increasingly expensive, with costs expected to hit £15.5billion by 2030. Experts warn this could make promises to maintain the policy unsustainable without raising the pension age. The government usually reviews the state pension age every six years, but this one is happening early to make sure the rules are fair and match up with how long people are living now. This is the third review of its kind and is set to be completed by March 2029. How is the state pension age changing? The state pension age is currently set to rise from 66 to 67, and this change is already written into law. The increase will be phased in between 2026 and 2028. If you were born before April 6 1960, your state pension age remains 66. This means anyone who is already 65 won't be affected and can start claiming their state pension when they turn 66 next year. If you were born between 6 April 1960 and 5 March 1961 and are now aged between 64 and 65, your state pension age will be 66 plus a few extra months, depending on your exact date of birth. For anyone born on or after March 6 1961, your state pension age will be 67. The state pension age is then planned to rise again from 67 to 68 between 2044 and 2046 under current law. Again, this affects people based on their date of birth. This schedule is now subject to review but, as of now, affects people based on their date of birth and current age. If you were born before April 6 1977, your state pension age will stay at 67. This means anyone older than 48 years and 3 months will still be able to claim their state pension at 67. But if you're younger than this, you'll have to wait until you're 68 to claim your state pension. You can easily find out when you'll get your state pension using our handy tool. Just enter your date of birth, and it will tell you. How will a higher state pension age affect my retirement? By James Flanders, Chief Consumer Reporter: Raising the state pension age means people will have to wait longer to get their government-funded pension, which can be tough for those who rely on it as their main source of income. It's especially challenging for people in physically demanding jobs or those with little in the way of savings, as they'll need to figure out how to cover the gap between stopping work and qualifying for the state pension. But the good news is that private pensions give you more choice. Right now, you can access private pensions from age 55, although this will increase to 57 in April 2028. If you've been saving into a workplace pension or a personal pension, you could retire earlier than the state pension age, depending on how much you've saved. You can take the money as a lump sum, set up regular payments, or even leave it invested to grow. For those with enough savings, this flexibility means you can plan retirement around what works for you. But if your private pension isn't enough, you might find yourself working longer and waiting for the state pension to kick in. It's a reminder of why starting to save early and keeping an eye on your pension pot is so important for creating options later in life. What could change in future? The big question is whether the move to a state pension age of 68 will be brought forward. An earlier government review, called the Cridland Review, recommended this rise should happen much sooner - between 2037 and 2039. If the Cridland Review proposals are adopted, you could end up waiting a lot longer to claim your state pension. If you were born before April 6 1970 and are now 55 years and three months old or older, your state pension age would stay at 67, so nothing would change for you. However, if you're older than this and were born between April 6 1970 and April 5 1971, your state pension age would fall somewhere between 67 and 68. For anyone born on or after 6 April 1971, the state pension age would be 68. This means if you're 54 years and 3 months old now, you wouldn't be able to claim your state pension until you turn 68. The big question is whether the state pension age will rise to 68 sooner than planned. The government has decided to do another review instead of following the Cridland Review. This new review, led by Dr Suzy Morrissey, will happen within the next two years. It will explore all options for raising the pension age to 68 but must give at least ten years' notice before making any changes. This means anyone retiring before 2037 won't be affected. How does the state pension work? AT the moment the current state pension is paid to both men and women from age 66 - but it's due to rise to 67 by 2028 and 68 by 2046. The state pension is a recurring payment from the government most Brits start getting when they reach State Pension age. But not everyone gets the same amount, and you are awarded depending on your National Insurance record. For most pensioners, it forms only part of their retirement income, as they could have other pots from a workplace pension, earning and savings. The new state pension is based on people's National Insurance records. Workers must have 35 qualifying years of National Insurance to get the maximum amount of the new state pension. You earn National Insurance qualifying years through work, or by getting credits, for instance when you are looking after children and claiming child benefit. If you have gaps, you can top up your record by paying in voluntary National Insurance contributions. To get the old, full basic state pension, you will need 30 years of contributions or credits. You will need at least 10 years on your NI record to get any state pension. 2
