The age for claiming a state pension has gone up - here's how it could affect you
The age at which people are eligible to claim state pension has increased, meaning anyone born after 5 October 1954 will have a state pension age of at least 66.
The changes come into effect on 6 October 2020, and will mean that some women will not be able to claim their state pension until six years after the date they were told originally.
What has it risen from?
Until 2010 the state pension age was set at 60 for women and 65 for men, but changes since then saw the age for women rise rapidly to 65 by 2018, and now the first increase has hit men, too, creating an equalised state pension age of 66.
The age will continue to rise, meaning some people won’t be eligible to claim their pensions until they’re 68. The state pension age will rise to 67 in 2028, and 68 from 2037.
The full new state pension is currently worth £175.20 per week and the full basic state pension, for those who retired before April 2016, is worth £134.25 per week.
Pensions Director at Aegon, Steven Cameron, said the recent increases were implemented to make the state pension more affordable, and to reflect rising life expectancy, “but those about to claim their state pension may be surprised at just how much it’s worth”.
He added: “Aegon analysis shows the value of the full state pension, or the cost if bought as an annuity for life, is around £336,500. This may seem huge, but for most people, relying on the state pension alone won’t provide the lifestyle they aspire to in retirement.”
The considerable increase in state pension age for women over the last decade has been met with considerable criticism, as well as legal challenges, from campaigners under the WASPI (Women against State Pension Inequality) banner.
What about the triple lock?
As a result of the economic difficulties caused by the pandemic, there had been speculation that Chancellor Rishi Sunak would look to break the state pension’s ‘triple lock’.
The triple lock guarantees a rise in the amount of state pension received, by either the rate of inflation, average earnings growth or 2.5 per cent, whichever is highest.
This year, the triple lock guarantee saw pensions rise by 3.9 per cent in April, in line with average earnings growth.
However the government introduced a bill last week which would avoid an automatic freeze on the state pension next year due to the expected negative rate of earnings growth. This has been taken as confirmation that the triple lock will remain.
A version of this article originally appeared on our sister title, The Scotsman