Historic rise in state pension age could cost people up to £8,000

Published by Stephen Little on 06 December 2018.
Last updated on 06 December 2018

Unhappy pensioner

The state pension age is rising today for millions of people, potentially costing them thousands of pounds.

Under plans set out by the coalition Government in 2011, people born after 5 December 1953 will see their state pension age rise today as part of reforms designed to cut billions from the UK’s welfare bill.

The state pension age for men and women will gradually increase from 65 to 66 from now until 6 October 2020.

The state pension age is then due to increase to 67 by 2028 and 68 by 2039.

It is the first state pension increase for men since the modern system was introduced in 1948.

As the increase is being introduced incrementally, people will experience different state pension ages depending on when they were born.

Anyone born from 6 December 1953 to 5 January 1954 will have a state pension age of 6 March 2019 – meaning some have to wait up to three months longer to start receiving the payment.

Those born later will see a larger increase depending on their date of birth.

This means that a three-month rise in the state pension age could cost someone over £2,000 in retirement income, while those who have to wait a full year longer could miss out on over £8,000 in state pension.

AJ Bell warns the changes could have a “significant” impact of people’s finances.

Tom Selby, senior analyst at AJ Bell, says: “A state pension age increase probably isn’t what most people asked for in their Christmas stocking, but that will be the reality for many people who are about to turn 65.

“While this might feel like a cruel lottery for those immediately affected, younger generations will need to prepare for rises in the state pension age to 67 and 68. Indeed, if life expectancy continues its long-term trend upwards a state pension age of 70 could well be on the cards."

He adds: “For most savers – and particularly younger people – the clear signal coming from the state is that if you want security in retirement, you need to provide it for yourself.”

Increase in state pension age from 65 to 66 for men and women
6 December 1953 - 5 January 1954 06-Mar-19
6 January - 5 February 06-May
6 February - 5 March 06-Jul
6 March - 5 April 06-Sep
6 April - 5 May 06-Nov
6 May - 5 June 06-Jan
6 June - 5 July 06-Mar
6 July - 5 August 06-May
6 August - 5 September 06-Jul
6 September - 5 October 06-Sep
6 October - 5 April 1960 66 birthday

Source: AJ Bell, December 2018

Nasty shock            

The government is also planning further increases, which will raise the state pension age from 66 to 67 between 2026 and 2028.

However, millions of people are still confused by the new rules.

According to YouGov research for charity Age UK, one in four people aged between 50 to 64 don’t when they can claim their state pension.

Age UK warns that people who are unable carry on working could be in for a “nasty shock” and is calling for the government to allow early access to the state pension for those affected by the changes.              

Caroline Abrahams, charity director at Age UK, says: “The most pressing and immediate concern is the hundreds of thousands of people in their 50s and 60s who are unable to carry on working today, and who are really struggling financially as a result.

"We are thinking, for example, of lifelong manual workers crippled by arthritis and carers who have given up work to look after an ailing partner or parent, and who face the prospect of being totally broke as they wait to claim their state pension.”

She adds: "The government needs to do much more to help people in this position now. More support should be given to those who are badly affected by increases in state pension age, like men and women earning low wages who are completely or mainly reliant on the state pension to get by in retirement.”

Pensions made simple with PensionBee

Advertisement
  • Combine your old and lost pension pots into one online plan
  • Take complete control and have 24/7 access to your pension balance
  • Your own dedicated BeeKeeper (account manager)
  • Make withdrawals online from the age of 55

Leave a comment

Means tested! Why? It's not

Means tested! Why? It's not a benefit! We paid for it! Like many other 50 s born women, when we got married we signed up to pay larger NI Stamp to provide us with our own pension and the right to retire at 60! It's hardly our fault there have been incompetent administration who mismanaged the pot, reduced the amount agreed paid in by the Government and are leaving elderly to work longer and in the case of those with ill health destitute, try to live on a meagre works pension! Someone them.

Why don't you explain they

Why don't you explain they will still be better off than us who are stuck with the old lower pension even after paying in for 50 years. The gap between old pension and new pension gets wider every year as the new pension gets a larger increase than the old pension. The pension rules have changed and we have to live with it, women are sill better off than men, should just be made equal overnight.

Not bad for the fifth richest

Not bad for the fifth richest economy in the world .Trashed public services and a trashed state pension .I am sure that those making these decisions will be fine though.

The longevity is not rising

The longevity is not rising and this has been proven, but this government just keep stitching the taxpayer up.

Well because I was born a

Well because I was born a male I had to pay full contributions when I was working before I got married not just after getting married, I had to work an extra 5 years before getting my pension after 50 years of contributions unlike a female that wants to pay in less and get it 5 years sooner. Stop moaning you are getting a bigger pension than we do although we paid more for longer. I thought you females approved of equality well I think it's time males got equality, females should work to same age as males before they get the pension, it's only fair after all females tend to live longer so claiming more from the pot. Better if it was those who don't pay in enough don't get the same and end GPC which goes mostly to females.

Even though I'm female I

Even though I'm female I opted to pay full stamp like a great many other women so your assumption that women get more than men is wrong, if they paid the lower stamp they got a smaller pension and actually my retirement age is 66 that is a working life of 51 years as I left school at 15 so I am not getting more than you for paying in less.

I agree if you paid full

I agree if you paid full contributions all you working life you will wait one year more than we did but bear in mind the pension you will receive as you will get the new rate pension which is approx £35 a week more than we get under the old system.

My Dad who is 84 gets £20 a

My Dad who is 84 gets £20 a week more than my husband and thats based on them both working exactly the same years to qualify, so I don't get where people prior to the changes are worse off unless they didn't pay into serps which is what both myself and my husband will lose at a cost of £20 each per week, my husband is already losing that money and has been for nearly 2 years. A better way of sorting this would have been to bring men down to 63 and put women up to 63 it would have been much fairer on everyone, and it would at least made it less bitter to everyone.

People retired on old pension

People retired on old pension rules get approx £130 a week but may have some additional state pension which they paid extra for, people on the new state pension get approx £165 a week. Serps applies to those with private pension where part of NI contributions were paid in private pension so reduces state pension as you never paid full amount into it. My sister born in the 50's had to wait for her pension later than 60 but she was fully aware she was going to, to many women ignored all the information until last minute then moan like hell.

Why did you have to work an

Why did you have to work an extra 5 years to qualify for your OA pension ?

Because men had to work to 65

Because men had to work to 65 and women only 60, the new rules bring in equality.