The state pension has been ever-changing since its first inception as the Old Age Pensions Act of 1908. Back then, the state pension payment was just 5 shillings, or the equivalent of around £20 a week by today’s standards. Though it’s a far cry from the £107.45 a week that the full basic state pension provides pensioners now, it revolutionized the UK and provided paved the way for the modern welfare state that all British citizens enjoy today.
Changes to age limits
Because of the government’s “triple lock,” pensioners can now look forward to their state pension payments going up each year, in line with either the national increases in wages, inflation, or 2.5% — which ever is larger. However, the state pension payments aren’t the only things that have changed and felt many increases since 1908.
The state pension age is increasing as well, and knowing whether or not these changes affect you is crucial to your ability to plan for your retirement.
Between November 2018 and October 2020, the state pension age will rise to 66 for both men and women. Previously, the state pension was scheduled to rise again between 2034 and 2036, when men and women would need to be 67 to retire. However, in Chancellor George Osborne’s last Autumn Statement, he stated that the state pension age would actually rise almost a decade sooner, between 2026 and 2028. This change has not yet become law, and will require the approval of Parliament, but it is useful to prepare ourselves
The government has stated that the age hikes are a necessary precaution to make sure that the state pension system is sustainable for future generations. With life expectancy rising 1 year every 4 years, Britons are living longer than ever before, pushing up costs of a normal retirement each year.
Will this affect me?
If you were born in the 1950s, your state pension age is already set to increase. Women born on or after 6 April 1953 have a state pension age of 65 if they retire between April 2016 and November 2018. Both men and women will then have the same state pension age of 66 by December 2018, which affects men born on or after 6 December 1953.
Anyone born from 6 April to 5 May 1960 will have a state pension age of 66 years and 1 month. Anyone born the following month, from 6 May to 5 June, will have one more month to wait, and will only be able to collect the state pension at 66 years and two months. This goes on for anyone born in 1960, with those born each month successively needing 1 more month until their state pension age. Anyone born from 6 March 1961 to 5 April 1969 will be able to collect their state pension at 67.