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Retirement plans pushed back by State Pension changes

20 May 2018

Nearly two million people will retire many years later than planned or with less income than anticipated as a result of changes to the State Pension age, with women’s plans more effected than men, according to new research by Retirement Advantage. 

The retirement income provider said that two thirds (66%) of people aged 50 and over* are aware of the changes being made to equalise State Pension age, with more than one in four (28%) of them having altered their retirement plans as a result.

The Government has been increasing the State Pension age which is currently 65 for men and gradually increasing for women from 60 to 65, and from 2019, the State Pension age for both men and women will reach 66 by October 2020, with further increases, raising the age to 67 between 2026 and 2028.

The State Pension age is going to be kept under review, which means that it could change again in the future, depending on different factors, such as changes in life expectancy.

The Retirement Advantage research showed the impact was greater for women than men, with only one in five (21%) of men needing to change plans, compared to more than one in three (35%) women.

Women are also much more affected in terms of how much they are altering their plans. Nearly a third (29%) of those who are changing their plans expect to retire six to ten years later than planned, while only 13% of men reported the same. In addition, one in five (20%) of women say they will retire with less income than they had originally planned, compared to just one in seven (15%) of men.

The trend of women being more likely to alter their plans than their male counterparts is also the case for State Pension forecasts. More than one in four (28%) women who have received a State Pension forecast have changed their plans as a result, while the number is one in six (16%) among men. However, nearly two thirds of women (59%) either haven’t requested a forecast, don’t know what it is or how to get one.

Andrew Tully, pensions technical director at Retirement Advantage, said: ‘These findings make clear the significant impact the changes to the State Pension age are having on retirement plans. It’s also clear the equalisation of State Pension age is changing women’s plans to a greater degree than men.

“Many over 50s are telling us they have heard there are changes to State Pension ages but don’t know the details. It’s important that everybody approaching retirement requests a State Pension forecast and consults a professional financial adviser to get a better idea of how the changes may affect them. Getting advice now is one of the best ways of ensuring your retirement plans stay on track.”

• Just over 1,000 people took part in the Retirement Advantage survey.

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