The Daily Telegraph - Your Money - - YOUR MONEY - Richard Dyson

We will be wait­ing longer for of our pen­sions, not just the state pen­sion

News on Wed­nes­day that a co­hort of al­most six mil­lion peo­ple – those in their 40s, and they in­clude me – would have to wait longer for their pen­sions caused pre­dictable dis­may.

Those born be­tween 1970 and 1978 will get their state pen­sion at age 68, un­der a pro­posed re-jig that brings for­ward the ex­ist­ing timetable to grad­u­ally in­crease the state pen­sion age. As I’ve said here be­fore, there are ex­cel­lent rea­sons to limit the bur­den of state pen­sions. Other coun­tries, such as Brazil, have be­come crip­pled by their equiv­a­lent prom­ises. Un­less re­form is planned decades ahead, the pub­lic un­der­stand­ably be­comes en­raged at what they feel is a lost en­ti­tle­ment.

The key is to re­move the is­sue from the bull­ring of party politics and give gen­er­a­tions enough no­tice of change so they can plan and ad­just. The pro­pos­als seems un­com­monly far-sighted and I for one won’t com­plain.

But what few peo­ple re­alise is that the state pen­sion age is a trig­ger for other pen­sions, too.

The “pri­vate pen­sion age”, if you like, is linked to the state pen­sion age.

Back in the days when most of us ended up us­ing our work and pri­vate pen­sions to buy an­nu­ities (in­sur­ance poli­cies that pay in­come for life) this did not mat­ter so much. Most of th­ese pen­sions would con­vert to an­nu­ities when the savers were in their 60s.

But we now live in the age of “pen­sion free­doms”, fol­low­ing the huge shake-up ini­ti­ated by Ge­orge Os­borne in 2014 and ef­fec­tive from 2015.

This gives peo­ple ac­cess to pen­sion cash from age 55. At least at the mo­ment.

In fact the Gov­ern­ment has in­di­cated pre­vi­ously this age will rise, al­though it has not made the point very loudly. In the con­sul­ta­tion on the is­sues around pen­sion free­doms, it pro­posed “to in­crease the min­i­mum pen­sion age from 55 now, to 57 from 2028, along­side the in­crease in state pen­sion age to 67.

“From then on, the min­i­mum pen­sion age would re­main 10 years be­low state pen­sion age.”

If that comes to pass I could ex­pect to ac­cess my per­sonal or work pen­sion money from age 58, rather than 55. This is worth un­der­stand­ing fully, as the free­doms are al­ready en­cour­ag­ing peo­ple to think more broadly about how they plan to use their pen­sion cash. Many would still ex­pect or hope to be work­ing in their late 50s, but they may even so wish to ac­cess some of their pen­sion in or­der (for ex­am­ple) to meet chil­dren’s tu­ition fees or other one-off costs. Now those plans, too, will need ad­just­ment.

The ax­ing by banks of le­gions of branches is a trend that has been go­ing on for decades. The clo­sures are re­gret­table for the in­di­vid­u­als or

Too much, or too lit­tle? Other coun­tries have be­come crip­pled by state pen­sion com­mit­ments

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