Pensions expert offers tips to keep finances on track in 2022
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The Government is coming under increasing pressure to slow the increase of the state pension age. The state pension age will move to 67 between 2026 and 2028 and then to 68 between 2044 and 2046 under current legislation. The Department for Work and Pensions (DWP) is due to publish its second review into whether its schedule remains appropriate in May 2023, including a decision on whether the increase to 68 should take place seven years earlier.
As the Government considers a rapid age rise to 68, a study by pensions consultants Lane Clark & Peacock in December found that stalling life expectancy means the state pension age should not change for more than two decades.
Money Mail analysis also suggests that a growing health and wealth gap means any hike to the retirement age will hit northern regions harder.
Sarah Taylor, 61, will be affected by the policy, and will now get hers when she is around 66 and nine months.
The extra nine-month wait will see Sarah, from Tunbridge Wells in Kent, miss out on more than £6,000.
She told This is Money: “As a Sixties baby, we all had expectations of having pensions when we were 60.
“But that all changed and it keeps on getting further away. It just feels it is almost unfair. It is a lottery when your birthday falls.
“When you get past 60, you never know what could happen. I have paid my National Insurance over the years so I want to get what’s owed to me.”
Commenting on the policy, former pensions minister Sir Steve Webb added: “The Government’s plans for rapid increases in state pension age have been blown out of the water by this new analysis.
“Even before the pandemic hit, the improvements in life expectancy which we had seen over the last century had almost ground to a halt. But the schedule for state pension age increases has not caught up with this new world.
“This analysis shows that current plans to increase the state pension age to 67 by 2028 need to be revisited as a matter of urgency.”
Helen Morrissey, senior pensions and retirement analyst at investment firm Hargreaves Lansdown, told iNews this week: “We’ve seen state pension age increase rapidly in recent years to accommodate this, but the situation is not so simple anymore.
“There is growing discussion as to whether future increases should be brought in quite so quickly as longevity does not seem to be increasing at the same rate it once was.”
Prime Minister Boris Johnson and his colleagues in Government have also come under scrutiny for their decision to suspend the triple lock for the state pension.
The policy previously guaranteed that the state pension increases every year by whichever is the highest of inflation, earnings growth or 2.5 percent.
Rather than give pensioners an eight percent uplift in line with wages, ministers created a double lock, meaning the increase in April 2022 will be 3.1 percent – September’s inflation figure.
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But experts and commentators have warned that this increase may not be enough given ongoing inflation fears.
Baroness Altmann also spoke to Express.co.uk in November, and explained why the ditching of the triple lock could be so damaging.
She said: “We already know that pensioners were struggling to make ends meet if they only had the state pension payments, and given the rise of prices is effecting basic goods like food and energy, they will increasingly this winter have to choose between keeping warm and keeping fed.
“It could well cost lives.
“The fact is the Government have taken money off the poorest people in the country, and I don’t believe that is fair.
“I believe that is an absolute betrayal, I really do feel this was a very wrong decision.
“I hope the fuss we make this year will mean that this doesn’t happen again.”
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