Changes To The State Annuity

Changes to the state annuity

The current ages at which folks may claim state allowance are 65 years old for men and 60 years old for girls though from April 2010 there has been an incremental move to equalise the state allowance age at 65 by 2020 for girls born after 5 April 1950. ?Employers and workers alike have often adopted these retirement ages, with a few folks choosing to work on after these ages, though the govt. has been at pains to prompt people to do it. Some have been entitled to early retirement, although in some cases this has been as an alternative choice to redundancy.

Once the state pension had been equalised at age 65, the Pensions Act 2007 provided for it to extend by one year over a two year period from April 2024 and then again in April 2034 and April 2044. Thus by 2046 the SPA was to be 68.

However , the coalition government plans to bring in a state annuity age of 66 from April 2020, six years ahead than had formerly been planned. This would suggest that women’s annuity age must increase to 65 earlier than had formerly been planned. The government is also considering implementing a more automatic way of augmenting the state allowance age to reflect changes in projected longevity.

At the opposite end of the spectrum, up to date changes to legislation permitted retirement as early as the age of 50 from all schemes, however, this was raised to the age of 55 from 6 April 2010.

The Allowances Act 2007 also reduced the period over which an individual must pay NICs to qualify for a full pension from 90 % of working life (44 years for a person and 39 years for a lady) to 30 years for everyone, those who reach state annuity age on or after 6 April 2010.

All these changes is likely to come as an unwelcome surprise to females that were looking to take anearly pension at 60

The sort of state annuity that an individual person can expect to obtain at state allowance age is uncertain, with a pre-planned gradual move away from an earnings based state second annuity to a set rate scheme already active and predicted to reach its conclusion by around 2032. This in simple terms may not basically come to pass with the prevailing state now consulting on the possible arrival of a universal state allowance which may replace the prevailing system of basic state annuity, state second allowance and allowance credits.

Pension Age and Early Retirement are key issues looked at by My UK Pension Plan, an online service which connects individuals with Financial Advisers