The State pension age (SPA) is under review again and later life planning continues to be very important.
The current situation is:
– SPA is 66 for men and women.
– It will gradually rise to 67 over two years from next April.
– At least ten years’ notice will be given of any change to SPA.
– SPA could rise to 68 in the future. Currently, the SPA increase to 68 is legislated to be phased in over two years from April 2044. The first review (in 2017) proposed that the SPA should rise to age 68 from 2037–39. A second review (in 2022) proposed 2041–43 for the move to 68.
The Department for Work and Pensions (DWP) have recently released the results of its second ‘Planning and Preparing for Later Life’ survey, with some important results. The survey showed that 44% of people expected to retire before their SPA. In terms of an ‘ideal retirement age’, those who had not yet retired settled on a median age of 60. Anyone retiring at that age now will be left with a seven-year State pension gap of over £83,000 (plus triple lock increases) to fill.
The survey also found that 41% of people ‘had no idea’ how much income they would need in retirement. Around two-thirds of people below SPA said the amount of State pension they receive would be very important/important in their decision on when to retire.