In times of inflation and stressful economic activities in the UK, there were reports that the retirement age will be pushed towards 68, a decision being discussed in the halls of the Treasury to save billions of pounds in the state pension.
Originally, retirement-eager individuals were looking forward to seeing a change in the retirement age in the late 2040s, but the state’s discussion of pushing it in the mid-30s will put millions of people into work, with talks of “being condemned to misery and poverty” for many being the talk of the town.
Read more about this down below, and make sure you know where you stand in light of these events.
Table of Contents
So, What’s The Big Announcement?
As things stand right now, there’s no official announcement as to whether the retirement age will be increasing to 68 in the coming years or not, but it’s safe to say that it all started when The Treasury expressed the intent that millions of people, born 1970 and above, could be working for longer than they’d expect. The decision to move the retirement age to the mid-2023s has now been delayed until 2024, after the general election, due to falling life expectancy in the UK.
Though what’s creating a wave of riot is that the rise of retirement age to 68 wasn’t going to come until the late 2040s, and seeing as now it could be coming as early as 2035 is creating a problem for a lot of different people, especially the ones that are looking forward to finally retiring.
What Is SPA, and Where Does It Stand Right Now?
For those that don’t know, SPA is what we refer to as the State Pension Age, the minimum age after which an individual can start receiving retirement benefits from the state. Though, it’s important to understand that the SPA is different from other retirements, which include workplace retirement funds and others.
Currently, for the people that were born before April 1970, the current SPA is 66, and for those born after this date, there will be a systematically phased increase toward the age of 67, which is due to happen in 2028. However, the increase to 68, which wasn’t due to happen until the late 2040s, is now seemingly rumored to happen in the mid-2030s.
How Will This Affect You?
It’s a no-brainer that having to work, even if it’s a year longer, to get financial benefits from the state will create a lot of problems for millions of individuals, especially the ones who are already struggling financially in these inflation-prone times.
Currently, for the current tax year of 2022-2023, individuals that became pensioners after the 6th of April 2016 receive a weekly benefit, which is £185.15 per week (the full state pension). This amount is down to £141.85 for the people that became pensioners after the given date.
This means that with the pension age limit being pushed towards a higher number, millions of people that are looking forward to receiving these benefits will be condemned to working longer, and considering that many individuals that reach the SPA are in poor health, working longer seems something out of bounds.
However, in the opposite direction, many in the financial analytics business claim this could be a huge money spinner for the government and might bring more stability to the collapsing economy due to inflation.
The Government’s Take On This
It makes sense as to why the government would want to push the SPA a year higher, considering that the State Pension makes up roughly 42% of the welfare spent by the government, on the people. Pushing the SPA, just a year higher, could potentially save billions in welfare, which can further contribute towards bringing in the much-needed stability.