The State Pension age is set to start rising from 66 to 67 next year
People reaching pension age have been urged to plan their retirement with a comprehensive guide. The checklist can help people work out their income, expenditure and any extra financial support they could get.
As reported by the Daily Record, the State Pension age is due to start increasing from 66 to 67 next year, with the rise set to be completed by 2028 for all men and women born between 6 March 1961 and 5 April 1977. This planned change to the official retirement age has been in law since 2014, with another increase in the State Pension age from 67 to 68 expected to take place between 2044 and 2046.
This contributory benefit provides crucial financial support to nearly 13 million older people across the UK, including over a million pensioners living in Scotland. This regular payment of up to £230.25 per week is available for those who have reached the eligible retirement age set by the UK Government and have paid at least 10 years’ worth of National Insurance contributions.
Many people nearing the official retirement age this year or next, and eligible to start claiming State Pension from the Department for Work and Pensions (DWP), or those nearing 55 and eager to start withdrawing from a personal or workplace pension, might not be aware of a useful checklist created by the Citizens Advice network. This checklist is designed to help navigate the unfamiliar territory of the journey to retirement.
If you’re approaching the end of your working life and unsure about what financial support is available in later life to help you fully enjoy your retirement, this nine-point checklist is a great starting point.
Retirement checklist
Citizens Advice Scotland provides a comprehensive guide to retirement planning, which you can access here. Below is a brief rundown of what you should consider as you near retirement.
1. Calculate your expected income and consider how your expenditure might alter once you retire – the Citizens Advice Budgeting Tool can assist in creating a budget.
2. If you’re receiving benefits, inform the provider about your retirement plans – you may need to apply for a different benefit or the amount you receive could change.
3. Investigate whether you’re eligible for any new benefits – you might qualify for benefits such as Carer’s Allowance, Carer Support Payment, Housing Benefit or a Council Tax Reduction.
4. Determine how much remains on your mortgage (if applicable) – you might wish to clear the remaining balance with a lump sum, but it’s advisable to seek financial advice first.
5. Obtain an estimate of your State Pension – the GOV.UK State Pension calculator can help with this.
6. Locate any pension providers that you’ve lost touch with – the Pension Tracing Service can assist with this. You can reach them at 0800 731 0193 or use their online form to find a lost pension.
7. Contact all your pension providers and inform them of your retirement plans – they’ll typically send you crucial information about your pension.
8. Seek financial advice or assistance from MoneyHelper (formerly Pension Wise) – particularly if you have a personal pension, to ensure you’re aware of all the options available to you. While independent financial advice may come at a cost, it could prove beneficial in the long run.
9. Consider bequeathing your pension pot to someone upon your death – bear in mind that this will have tax implications, so it’s advisable to consult with your pension provider or an independent financial adviser.
For more information on preparing your finances for retirement, visit the Citizens Advice Website here.
State Pension age change
It’s crucial to be aware of the impending change now, especially if you’ve already established a retirement plan. All those affected by changes to their State Pension age will receive a letter from the DWP well in advance.
People born on 6 April 1960 will reach the State Pension age of 66 on 6 May 2026, while those born on 5 March 1961 will reach the State Pension age of 67 on 5 February 2028.
Your State Pension age is the earliest age at which you can begin receiving your State Pension. It may differ from the age at which you can access a workplace or personal pension.
People of all ages can utilise the online tool on GOV.UK to check their State Pension age, which can be a vital part of planning your retirement.
You can use the State Pension age tool to check:
- When you will reach State Pension age
- Your Pension Credit qualifying age
- When you will be eligible for free bus travel
You can check your State Pension age online here.