‘Forced out of work’: Fury over state pension age changes after Covid

Budget 2021: Experts outline state pension changes

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

The country’s state pension gradually increases every couple of years, taking into account the overall life expectancy of citizens. Currently, the state pension age stands at 66 years old with claimants receiving £179.60 a week or £9,339.20 a year for the new state pension. According to the Government’s most recent legislation, the state pension age is set to be changed to 67 by 2028.

However, experts are warning that the COVID-19 pandemic has likely detrimentally impacted life expectancy within the UK and are encouraging the Government to review their decision to hike the age threshold.

Recently, the 2017 State Pension Age Review (Cridland Review) proposed an increase in the state pension age to 68 over two years from 2037.

Despite this recommendation, the Government is set to undergo another review into the state pension age before making any formal legislation.

This next Government review is set to take place over the next 18 months and will likely examine the impact of Covid-19 on the general life expectancy of pensioners up and down the country.

READ MORE: Martin Lewis shares top two ‘unbeatable’ savings accounts – ‘if you can, you should!’

Among the organisations voicing their concern ahead of the Government’s review is the International Longevity Centre-UK (ILC).

The think tank is calling on the Department for Work and Pensions (DWP) to outline their plans for the 2022 Independent State Pension Age Review.

As part of its plans, the Government is hoping to increase life expectancy by five years by 2035, however David Sinclair, the Director of ILC, believes this is unlikely to be met.

Mr Sinclair said: “COVID-19 has likely had an impact on life expectancy and certainly had an impact on the employment rates of older workers.

“It’s also highlighted the huge disparities in how long we live and how healthy we are. Too many people are being forced out of work before the state pension kicks in.

“The Government has set itself an ambitious target of tackling inequalities in life expectancy, but there hasn’t been an adequate plan to realise this goal.

“Considering how effectively we support people to work longer must play a part in the decision about whether to increase the State Pension Age. Yet older workers have been hit hard by COVID-19.

“The Government is due to undertake its next Independent State Pension Age review over the next eighteen months.

“If they want to follow their plans to increase the age we receive our pensions further, they must be clear about how they will mitigate the impact on those of us who aren’t living longer and healthier lives.

“It is vital that the Government doesn’t dodge the inequalities issues. We need a plan to level up healthy life expectancy.”

After the Government’s decision to scrap its triple lock pledge, the state pension is set to be raised by 3.1 percent next year.

This will align the state pension with September’s Consumer Prices Index (CPI) inflation estimate.

Tom Selby, head of retirement policy at AJ Bell, comments: “The good news for retirees is the state pension is set to increase by 3.1 percent next year, boosting the incomes of those in receipt of the full flat-rate benefit by £5.55 a week.

“The basic state pension, meanwhile, is set to rise by £4.25 to £141.85 per week. However, the Government’s decision to suspend the earnings element of the state pension triple-lock means retirees will miss out on a blockbuster 8.3 percent increase.

“This decision will ‘cost’ someone in receipt of the full flat-rate state pension £9.35 a week in retirement income – or £486.20 over the course of the year.

“Each one percentage point increase in the state pension costs the Exchequer an estimated £900million, meaning the Treasury is likely to save around £4.5billion as a result of the move.”

Source: Read Full Article