According to the Department of Work and Pensions, quoted by the Daily Mail, (here), more than a million pensioners depend on the state pension for all their income. This means that more than a million people are living below the official poverty line and have little prospect of income rising in real terms.
Particularly hard hit are widows, who had been relying on their spouse’s pension to top up their incomes. Women are less likely to have personal pension in their own names and generally contribute much less into pensions overall, so living longer will place more strain on their retirement finances.
Currently, the full flat rate state pension is £8,297 per annum or £159.55 a week, so the first big question is “Can you live on it?” The second big question is when will you get it? as that is a movable feast, with state pension age rising to 68 for people born after 6th April 1978, (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/310231/spa-timetable.pdf). A further complication is that less than half of new retirees get the full, flat rate pension for one reason or another.
The only way to ensure your level of income in retirement is to make some personal provision, and use Pension Freedoms to adjust your income and retirement date to something more to your liking.
It is possible that the political will to move the pension age and remove the current “triple lock” on pension values, is strengthening, so further movement in pension age and a potential reduction in value needs to be considered.
If you are looking for some certainty, then you need to look at “self-help”!
If you would like to know more about how we can help you plan and realise your financial goals then contact us at firstname.lastname@example.org or call us on 01223 792 196.
The information contained is for guidance only and does not constitute financial advice. It is based on our understanding of UK legislation, whether proposed or in force, and market practice at the time of writing. Levels, bases and reliefs from taxation may be subject to change. Accordingly no responsibility can be assumed by Martin-Redman Partners its officers or employees, for any loss in connection with the content hereof and any such action or inaction.