State pension: Age changes force Britons to reconsider their plans for retirement | Personal Finance | Finance

July 14, 2021

State Pension age changes have gradually been coming into force for a number of years, impacting millions of people. The first major change was state pension equalisation, which saw the eligibility age set at 65 for both men and women, despite women previously retiring at 60. Since this point, the state pension age has been gradually increasing and it has now hit 66.

However, this will not be the end of changes, and the state pension age is eventually set to reach 68.

Understandably, these alterations have affected many people, and indeed their understanding of retirement.

Research from Canada Life has shown almost a fifth of over-40s now say increases to the state pension age have affected their retirement.

Nearly a quarter of those asked said they would be shifting the age at which they retire to line up with their new state pension age.

READ MORE: Universal Credit: Up to £812 boost may be available to help Britons

Usually, 10 qualifying years are needed to get any state pension at all, while 35 years or more can unlock the full sum.

With a full state pension being worth approximately £9,340 per year, it is likely to provide assistance to retired people.

However, many experts have suggested this will not be enough to see Britons through retirement, and that individuals will need to find alternative sources of income in addition. 

Canada Life has posed equity release as a potential solution, where Britons can take equity from their property to supplement their retirement income. 

Alice Watson, Head of Marketing and Insurance at Canada Life, commented on the research.

She said: “As retirement journeys continue to evolve and fragment, driven by societal and regulatory change, holistic financial planning is becoming increasingly important.

“The wealth tied up in property is growing and is increasingly being used as a part of effective retirement planning, working alongside existing pension savings.  

“While releasing equity from property is a long-term decision that should include discussions with wider family, with the right advice it has a valuable role to play.

“It not only allows people to unlock the wealth stored in their property in a flexible and safe way, but also helps to support retirement lifestyle choices.”

When making decisions about one’s pension, or indeed whether equity release is a suitable option, the matter can be complicated.

As such, as a general rule, Britons are encouraged to seek advice on the matter before making major decisions.

Free help is also at hand through services such as PensionWise and Money Helper, promoted by the Government.