Tuesday, 29 November 2011

Wait until 67 for your pension

8 million people now aged between 42 and 51 will have to work up to a year longer and lose as much as one year's state pension.

That is the result of the Chancellor's decision to accelerate the move to a state pension age of 67, by introducing it in a two year transition starting in 2026.

The jump in pension age comes 8 years earlier than previously planned and will save the Exchequer £60bn over that period.

The Chancellor pledged that no one within 14 years of reaching pension age would be affected by the change, which the Treasury blames on rising life expectancy.

The decision puts in question a subsequent increase in the State Pension Age to 68, which would have occurred by 2046 according to earlier plans.

A faster move to 68 could now be on the cards. The Treasury says future increases will be based on "demographic evidence".

The charity Age UK said the change was a "bitter blow"  to many people fast approaching retirement especially those in ill-health, caring for relatives and those out of work.

The Department for Work & Pensions gave this breakdown of the age groups affected:

People born after 5 April 1960 and before 5 April 1961 (currently aged between 50 and 51) will have a State Pension age between 66 and 67.

People born between 5 April 1961 and 5 April 1969 (currently 42 to 50) will have a State Pension age of 67.

People born between 6 April 1969 and 5 April 1977 (age 34 to 42) already have a State Pension age of 67 - these proposals will not change this.

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