State Pension: Expert outlines criteria to qualify
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The current state pension age is 66 for men and women in the UK, but this number is set to rise gradually to 68 in the near future. A review is currently taking place to determine the speed of this increase, and whether it should be brought forwards to 2037 to 2039.
While the matter has not yet been decided, the state pension age has been confirmed as changing to make the system “affordable and fair”.
However, it could cause concerns about long term financial security as well as retirement plans.
Richard Eagling, Senior Personal Finance Expert at NerdWallet, said: “For many people, reaching the state pension age is the start of a new chapter in their life as it’s a time when important lifestyle changes may happen such as reducing working hours or planning to retire completely.
“However, changes to the state pension age can cause financial problems and stress, especially during the current cost of living crisis, as people will have to wait longer than expected to claim their state pension.
“This could see people working past their state pension age as, depending on their financial situation, they might not be able to afford to retire.
“However, it’s important to not only rely on the state pension for your retirement.”
With this in mind, Britons may wish to take action as it relates to their retirement.
Mr Eagling suggested setting up a secondary type of pension, as many will already be retiring with a state pension and a workplace scheme.
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Private pensions can be opened up individually and paid into oneself.
He added: “These may give you more control over your retirement savings, particularly SIPPS which may offer a greater range of investments.”
When it comes to pensions, tracking down old arrangements can also be key to avoid missing out on any cash.
As people’s circumstances change and they move jobs or addresses, they could lose touch with old savings.
The Pension Tracing Service can help Britons contact old employers or pension providers to reunite with their savings.
Mr Eagling also said Britons should check whether they are eligible for any benefits.
He explained: “Pension Credit, which is a tax-free benefit for those over state pension age on a low income, is often overlooked, so check whether you could qualify for it.
“There are a range of other benefits available in later life including Attendance Allowance, Winter Fuel Payment, and more.
“Each year, up to £3.5billion of benefits go unclaimed by older people in the UK, so it’s worth checking whether you’re eligible for anything even if you think you’re getting everything you are entitled to.”
It may also be beneficial for older Britons to make extra money, through a side hustle, for example.
Individuals may be able to combine their hobbies with setting up a small business to provide them with extra income. This could include painting, sewing, knitting, cooking and gardening amongst other pursuits.
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Alternatively, people could also make some extra money by disposing of old items and clutter.
Second-hand sellers or car boot sales could provide an opportunity to make extra cash.
Finally, Mr Eagling said cutting household costs is key, as it is an effective way to save money.
He concluded: “Check that you aren’t paying too much for your utilities or council tax, and reduce travel costs by making use of the free bus pass that you can get when you hit the state retirement age (this age is lower if you live in London or Wales).”
A Department for Work and Pensions (DWP) spokesperson told Express.co.uk: “The state pension continues to provide the foundation for retirement planning and financial security in older age.
“The Government is required by law to regularly review state pension age and recently launched the second state pension age review. The review will consider whether the rules around state pension age are appropriate, based on a wide range of evidence including latest life expectancy data.”
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