State pension age changes
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Hi everyone, with the government review talking place, I'm curious about what effect this will have on me. I'm 43, so understand that under current plans I'll be able to access my private pension at 58, but I don't understand how changes could affect this.
If they were to say hypothetically change the State Pension age to 70 from 2042, could I still access my SIPP at age 58 in 2040? Or would it all be based off what rules would apply at my future state pension age, taking into account future rules that would kick in between now and then?
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No one can predict the future, any changes will affect when you can draw on your private and state pensions. You can currently access your private pension at 55, but in April 2028 that increases to 57.
I expect as they move the state pension age higher, they will also increase the age you can draw on a private pension.
Obviously increasing state pension age saves them a shed load of money, not sure on the benefits of increasing the private pension age - people would perhaps have to work longer paying more tax (unless they were shrewd and invested in ISA's for example as well), but then others presumably would have taken their jobs, people moving up so to speak, and jobs opening up for others, which doesn't happen if people don't retire.
Your last sentence basically sums it, in my limited opinion.
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I'm probably overthinking it, just would be nice if I know I can get to it at 58, not really caring about the state pension at this stage, more how I plan out allocating funds between my ISA and SIPP to make sure I've got funds available without having to wait years.
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For the majority of Personal Pensions and SIPPS access to benefits is allowable 10 years prior to the State Pension age so any future increase to the state retirement age will also increase the age attached to your SIPP
The original review is based around mortality, people are living longer so the length of time the pension pays for has increased. That obviously puts strain on the resources hence the increases.
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I am sure there will be tweaks, but as Nik said, access to SIPPs is currently 10 years before SPA.
The future is always a great unknown….but trying to load up your ISA bucket to be able to bridge any gaps is a decent plan. I would work on the retirement age being 70 and access to SIPP from 60 being perhaps a “worst case scenario”. Perhaps 🫣
I was trying to see if we really are living longer - thought I had read we were not 🧐
The ONS data only seemed to go to 2020, but macro trends here showed that we are perhaps plateauing
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You can scroll to “Years of Life Expectancy” & see all the data, which indeed shows us living to 68 in 1950 & rising to 82 now, but if you check the past 10 years only, the average age has only gone up by about 1 year
Changes are inevitable, I feel, but living your healthiest life & loading your ISAs up has to be a good direction: live for today, plan for tomorrow
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Yeah I'm currently not paying anything into my ISA each year, but that's sat at around £110k, with my pension pots amounting to around £225k. Wanted to get a chunk more into my pension until that is on track to grow comfortably with just my workplace contributions, then look to focus a bit more on the ISA to bridge any potential gap and leave some flexibility if I decide to change careers as I begin to wind down.