State Pension Age Increase – Impact of the Chancellor’s 2011 Autumn Statement

01/12/2011

It was announced in the Chancellor’s Autumn Statement on 29 November 2011 that the Government propose to make further amendments to State Pension Ages for people born after 6 April 1960.

Following the Pensions Act 2011 receiving Royal Assent on 3 November 2011, the State Pension Age of men and women is planned to increase to:

66 between November 2018 and October 2020
67 between 2034 and 2036
68 between 2044 and 2046

What has now been proposed is that the increase to age 67 will take place 8 years earlier between 2026 and 2028.  This means that people born after 6 April 1960 will have the following State Pension Ages:

Under the Pensions Act 2007, people born after 5 April 1969 but before 6 April 1977 already have a State Pension age of 67. For people born after 5 April 1968 but before 6 April 1969, their State Pension age would have been between 66 and 67. Under the new proposals these people will now have a State Pension age of 67.

State Pension age is planned to start to increase to 68 from 2044 and this would affect anyone born after 5 April 1977. The government is considering how the State Pension age could better reflect changes in life expectancy in the future. This is likely to mean that the existing timetable to increase State Pension age to 68 will be revised.

The above proposals do need the approval of Parliament before they become law and it is possible that revisions and amendments may take place to the above proposals.  It is however important that divorcing parties have regard to the potential impact on their income in retirement should the proposals become law as the delay in receipt of State Pension benefits resulting from the above revisions could impact on any calculations performed to equalise pension incomes post divorce.

Rob Pritchard
1 December 2011