The time I’ll have to wait to draw my state pension got further away yesterday as the age at which most people start to receive it officially hit 66.
Men and women born between 6 October, 1954, and 5 April, 1960, will now start receiving their pension on their 66th birthday.
Truth is I’ve known this was going to happen for a few years now. In fact as I was born a few months later than that last date I’m going to have to wait another three months after I turn 66.
Even though I’m 60 and consider myself semi-retired, September 2026 still seems an awfully long time to wait. That’s unless, of course, the Government decide to push the date back further in the intervening years.
For those born after me, there will be a phased increase in state pension age to 67, and eventually 68. Before long I wouldn’t be surprised if the pension age hits 70.
The good news is that chancellor has vowed to keep the “triple lock” safe. Chancellor Rishi Sunak said: “Yes, our manifesto commitments are there and that is very much the legislative position. We care very much about pensioners and making sure they have security and that’s indeed our policy.”
Under this pledge, the state pension increases each year in line with the highest of average earnings, prices (as measured by inflation) or 2.5%.
Coronavirus and the furlough scheme is set to distort the calculations for average wages and could mean one bumper year of pension increases. Bring it on I say!
The full state pension for new recipients is worth £175.20 a week – £9,110.40 a year. For obvious reasons it’s only in recent years that I’ve become aware of the figure which, I have to say, was a little more than I imagined it would be.
I also didn’t know, until recently, that to receive the full amount, various criteria needs to be met including 35 qualifying years of national insurance. This led to a panicked check on the HMRC website where thankfully I learned I’d already contributed for 41 years.
As I’ve got a little closer to drawing my pension – two things have surprised me.
Firstly how little thought I’d given to pensions until I got into my fifties. What hope have governments got of getting younger people interested in saving for retirement when it is so far into the future and they have so many other pressures not least affording a place to live.
Secondly, the extent to which the state pension payment – surely one of the most basic benefits – have become so unreliable. At the very least to plan for your future you need to know when you will get it and how much you will receive.
And yet both are far from clear, the age at which the state pension begins has been rising, and will continue to do so. There is also plenty of debate over the future of the triple lock – the pledge to ensure the state pension rises by a minimum of 2.5% each year.
What an uncertain world we live in.