What is the State Pension Age?
What is the age when people will receive the state pension? It is one of the most searched for personal finance questions, and the answer depends on your circumstances. Right now, the state pension is 66, for those of you who are lucky enough to be approaching retirement. This is the earliest you can receive your state pension if you have paid in enough years of national insurance contributions.
However, that won’t be the state pension age for everyone.
It all depends when you were born. People are living longer, and spending a larger proportion of their adult life in retirement than in the past, so the age will be later for today’s younger generations.
The government plans to move the state pension age to 67 by 2028 and then 68 by 2046. And there are also plans to bring this second increase forward to between 2037 and 2039.
So, you need to be aware that even though the State Pension age is 66 right now, this is potentially going to be different based on your age, and could even change again.
To find out your exact state pension age, go to the government gateway website. Here you’ll be able to find out what your state pension age will be.
Given the potential variable nature of the state pension age, there are things you can do to add some more certainty to your retirement.
Consider investing in a Personal Pension or increasing your contribution in a Workplace Pension. This will mean you aren’t reliant on a state pension, you’ll be contributing and growing your money on your own terms. And keep in mind, the reality of it is that the state pension simply won’t be enough for some people to retire on.
The current state pension amounts to around £9,110 a year. Is that enough to live on? Think about the cost of your lifestyle and every day in retirement is like constantly being on the weekend. The likelihood is that £9,110 a year won’t be enough.
How much you’ll need in retirement will vary from person to person, but True Potential’s Savings Gap research shows that you may need around £23,000 a year in retirement. It could be the case you’re retired for twenty years plus, so it is important to start investing now.
Start with a goal, perhaps using the state pension age as an age to aim for. Set your goal, for example, say you’re 30 years old, you know you have 36 years in which you can put your money away in a diversified investment portfolio. Simply work out how much you’ll need to contribute each year and the assumed rate of growth in your portfolio.
Prepare today to ensure that you are in a comfortable financial position to retire on your terms.