An expert is urging Brits to complete five simple steps before Labour could hike the state pension age. Last month ChancellorReeves Reeves backed a review into the state pension age, arguing it is “right” to take another look at it.
Currently, the state pension age is 66 and is due to increase to 67 by 2028 meaning those born after March 6 1961 will have a state pension age of 67. The next increase to age 68 is legislated to start in 2044, but that could be brought forward. In a bid to help Brits planning for their retirement, Jonathan Greer, Head of Pensions Technical & Retirement Policy at Quilter has come up with five handy tips and says it is all in the “planning”.
Speaking to The Express the pensions expert said: “These are some steps that people could take to plan for their retirement.”
Five top tips to help Brits save for their pension:
1. Understand when they would like to retire and what type of lifestyle/costs/expenditure they might have.
2. Find out their state pension age and entitlement. They can get their state pension age by using the state pension age calculator on the Gov.uk website. They can also check their national insurance record to see if they are on track for the full state pension. The state pension is hugely important and valuable – for context to purchase an index-linked annuity that provides an income equivalent to the current value of the new state Pension—adjusted annually for inflation—from age 66, an individual would need over £200,000.
3. Check current savings and investment and pensions. Check workplace pension statements to see how much that might provide at their retirement age.
4. If possible/feasible, consider whether to increase pension contributions to workplace pension schemes. Are they taking full advantage of employer contributions (some employers will match additional employee contributions)
5. On the run up to retirement seek guidance from Pensionwise or seek professional financial advice (especially if their situation is complex).
Meanwhile, Tom Selby, director of public policy at AJ Bell, told The Express that the only answer for those affected by the age rise “is to save more privately, taking advantage of any available employer contributions, tax relief and tax free investment growth”.
He adds that the changing the state pension age to 68 could cause a “politicial firestorm”.
He says: “The downsides are that people will have to wait longer to receive their state pension, placing additional emphasis on private retirement saving.
“It would also cause a political firestorm, particularly in lower wealth parts of the UK where average life expectancy is lower.