State Pension Age

Following consultation earlier this year, the Government has confirmed that State Pension Age (SPA) will become 66 in 2020, for both sexes. This is six years earlier than under current legislation.

The present male SPA of 65 will be increased to age 66, on a phased basis, starting in December 2018.

For women, since last April the SPA has already begun to be raised incrementally from the traditional age of 60 for those born after 5 April 1950, with SPA due to have reached 65 by 6 April 2020. This process will now be move faster, starting in April 2016 (when SPA will already have reached age 63). The female SPA will now reach 65 in November 2018. From then, the phased increase towards age 66 will mirror that for men.

Who will be affected?

The acceleration to age 66 will only affect women born after 5 April 1953 and men born after 5 December 1953.

These changes will directly affect SPA in England, Scotland and Wales. However, whether Northern Ireland follows the rest of the United Kingdom will be decided by the Northern Ireland Assembly and Executive.

Within Great Britain, the Government estimate that around 4.9 million people will be affected. Of these, around 0.5 million men and 0.6 million women will have an increase in their SPA of less than a year. In addition, approximately 1.8 million men and 1.5 million women will an increase of exactly a year.

However, some women will experience an increase of up to 2 years in their SPA. For example, a woman born on 6 March 1954 is currently due to reach their SPA on 6 March 2018, when she attains 64 - under the changes she will have to wait until she reaches age 66.

Further changes

Under current legislation SPA is due to increase further, to age 67 over a two year period starting in 2034, and to age 68 on a phased basis between 2044 and 2046.

The message seems clear - expect more frequent changes to SPA and as always if you would like to review your retirement plans please do not hesitate to give me a call.

Yours sincerely

Jonathan Scott

Partner

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