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Strategic planning anticipates a range of eventualities: some we want to happen, some we fear will happen, and some we plan to make happen, our options are greater for the planning.

The State of Pensions

Until 1908 there was no state pension, just the Poor Laws. When the 1908 Old Age Pensions Act was introduced the maximum payment was a princely 5s (25p), the payment was means tested and you had to be at least 70 to get it.

Some would say that 100 years on we are fast headed back to where we started.

There have been many changes both to private and state pension schemes but surely one of the most contentious is the constantly moving goal post of the state retirement age.

This was set in 1928 at 65 for men and 60 for women and largely accepted as such for many years.  The first changes were introduced on the basis of ‘equalisation’ and the retirement age of women was programmed to increase gradually from age 60 to 65 between 2010 and 2020.  This meant that women born before 6 April 1950 could still retire at age 60, those born after 6 April 1955 had a retirement age of 65 and for those in-between there was a sliding scale between 60 and 65.

Next came more changes to increase everyone’s (male and female) state retirement age from 65 to 68 gradually between 2024 and 2046.  This has already been agreed and is the Government’s current planning.

Now, however, all bets are off.  The Conservative Party have announced that they will increase the state pension age for men to 66 in 2016, just 6 years time, and creating confusion over just what age women will receive their state pension.  If you’re paying attention you will have noted above that the state retirement age for women is already scheduled for transition between 2010 and 2020.  This means that in 2016 the transitional retirement age for women will be 63 but the new proposals say 66, three more years.  Confused?  I am.

The only element of consistency in state pension rules covering basic and added pension benefits has been the fact that benefits, in general, have consistently been eroded.  Whilst past performance is no guide to future events, as they say, I venture to contest that in this case they are.  State pension benefits will continue to be nibbled away making it even more imperative for us all to ensure that we have made adequate private provision because the safety net of state dependency is meagre.

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