- On July 20, 2017
Six million people this week learned they will have to wait a year longer than expected to claim their state pension.
Changes to the state pension age have been in the pipeline for some time, but in a surprise announcement the Government has brought forward the rise in pension age to 68 by seven years.
The rise will now be phased in between 2037 and 2039 instead of 2044 which had been the original timetable.
This means that anyone aged between 39 and 47 today (those born between April 6, 1970 and April 5, 1978) will face the extra wait. For many this will mean a year longer at work.
Andy Pulford, director of Faron Partnership Ltd, based in Shute End, said: “If people are totally reliant on the State Pension then the social impact of the delay will be significant.
“People will have to either work longer or use their savings to tide them over.
“If they have some additional pension provision they could use flexible drawdown arrangements to do some bridging while they wait for their State Pension.
“This could mean taking some tax-free cash or even taxable income to tide them over for that extra year.
“It’s going to be a particular problem for those in labour intensive jobs because of the additional physical demands of working to an older age.”
David Gauke, Secretary of State for Work and Pensions, made the announcement in the Commons on Wednesday, July 19.
He said: “There is a balance to be struck between funding the state pension in years to come whilst also ensuring fairness for future generations of taxpayers.”
The Government hopes the move will save £74billion by 2045/46.
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