How will the new state pension age announcement affect its people

How will the new state pension age announcement affect its people?

The government has announced that it will further review plans to raise the state pension age to 68. As per the plan, it will be reviewed within the next two years and put forth in front of the next parliament. What does it mean for people?

It stated that it needs time to collect information that is not accessible as of now and also considers the long-term effects of the COVID-19 pandemic and global inflation as they bring uncertainty with regards to life expectancy, labor markets, and public finances.

The state pension age would rise to 67 by the end of 2028, according to the government.

The state pension age is reviewed periodically and has been increasing over the years. The state pension age for women has increased from 60 in 2010 reaching at par with male state pension of 65 in 2018.

In 2010, the state pension age for women was 60; in 2018, the age was increased to 65, similar to the male state pension age of 65. However, by 2028, the state pension age for both men and women will increase to 67.

Although the state pension age is planned to increase by 2040, a few ministers are considering moving it forward by 2030.

The government has been planning to strike a balance between the aging population and the working population that supports them. For every 1,000 people working in 2020, there were 280 pensioners. By 2070, as per the projection, for every 1,000 people working, there would be 393 pensioners, as per the government projection.

Under the triple-lock, which is typically used to increase state pensions, the state pension will increase by 10.1% annually in April to reflect rising living costs.

As per the Institute for Fiscal Studies (IFS), there are significant long-term challenges coming from the aging population.

It was estimated that the cost to the Exchequer of not raising the state pension age from 67 to 68 beginning in the late 2030s could be between £8 and £9 billion per year.

Despite the average life expectancy of people generally improving, it has been greatly varied across the different parts of the UK. It has been observed that life expectancy is longer for those living in affluent areas.

The nature of jobs in various sectors, ranging from manual labor to office desk jobs, is another factor that influences.

It has been criticized that, due to the increase in the state pension age, many are facing hardships in making financial arrangements while planning their retirement.

It was observed by the IFS that when the state pension age was increased from 65 to 66, the income poverty rates doubled among 65-year-olds.

The progressive rise in life expectancy has slowed to a crawl after the state pension system was reviewed in 2017.

- Published By Team Timeswire

Leave a Reply

Your email address will not be published. Required fields are marked *