State pension age rises
In the past, the state pension age for women was 60, while it was 65 for men. The state pension age for women has been rising under the Pensions Act 1995 and this was then accelerated under the Pensions Act 2011 – reaching 65 in November 2018. This was ahead of further increases to the state pension age for men and women.
Office for National Statistics (ONS) figures show in the three months to September 2020, there were more than 340,000 people aged 50 to 64 who were unemployed.
This marks an increase of almost 85,000 on the last quarter – from April to September.
As such, Age UK is calling on the government to help those at risk of long-term unemployment in the run-up to receiving their state pension.
Meanwhile, the Great British Retirement Survey from interactive investor (ii) found one in eight people who are yet to retire think they will need to delay retirement because of the downturn in markets caused by the pandemic.
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This rises to one in five in the 60 to 65 age range.
Commenting, Becky O’Connor, Head of Pensions and Savings at interactive investor, said: “Unemployment caused by the pandemic is putting some older workers at serious risk of poverty and derailed retirement plans.
“As well as job loss, this age group may have faced added caring responsibilities that have made it harder for them to continue earning.
“Even before the pandemic, major life events such as illness, divorce or caring responsibilities could force people to reduce working hours earlier than anticipated, with a knock-on effect on their retirement income.
“Rises in the state pension age according to life expectancy are out of step with the reality of many people’s lives.
“Being alive for longer doesn’t correlate with being able to work for longer, because as we age, the chance of all of us experiencing setbacks that make it harder to work is greater.”
Ms O’Connor continued: “If, as a society, we continue to believe that people should be able to have some sort of retirement rather than work until they drop, then the Government needs to consider bringing in support earlier than state pension age for those that need it, taking a holistic view of an individual’s ability to return to work in the run-up to the age they can access their State Pension.
“People often start to run into ill health issues in their early sixties.
“Meanwhile the state pension age is gradually increasing and will be 67 by 2028.”
Ms O’Connor went on to warn that it may mean that some need to ensure their savings – including their pension pot – last longer than expected.
“If someone is unable to continue working due to ill-health from the age of 63 and has to stop work early, their pension will have to stretch further,” she said.
“For all workers planning their retirement, it makes sense to assume you will stop work earlier than retirement age when planning your finances.
“This will help prevent any damage done should something like ill health or job loss affect you later on.
“For younger workers, planning to retire earlier, even if they don’t end up doing so, will reduce some of the strain. This might involve, for example, planning to pay off your mortgage earlier, by your early sixties.
“It’s also worth checking the risk level of your workplace pensions is right for your life stage. Research we published last week showed that 15 percent of people don’t know the risk level of their pension.
“Risk levels have a huge impact on retirement outcomes. Too much risk at the wrong life stage isn’t sensible – but nor is too little.
“Over a fifth of 18 to 34-year olds are in low risk pensions, the ii research showed.”
Express.co.uk has contacted the Department for Work and Pensions (DWP) asking for comment.
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