PLSA Calls For "Midlife Financial MOTs"

7 August 2017

elderly man working Six million men and women will now have to wait a year longer than they expected to get their state pension it was announced this week by the government. Originally the rise to the state pensions was going to be phased in from 2044 but will now begin seven years earlier in 2037. Speaking in the House of Commons, the Secretary of State for Work and Pensions David Gauke said that they had accepted one of the recommendations of the recent Cridland report.

"As life expectancy continues to rise and the number of people in receipt of state pension increases, we need to ensure that we have a fair and sustainable system that is reflective of modern life and protected for future generations."

However, Graham Vidler, Director of External Affairs, Pensions and Lifetime Savings Association has said that the government must now take up one of Cridland's other recommendations.

"This proposal will affect more than 7 million people in their late 30s and 40s – the sandwich generation. This group are also those most at risk of inadequate private saving – they have not had the same access to final salary pension schemes as their parents and are too old to enjoy the full benefits of automatic enrolment that their children will see."

"We call on the Government to follow up on one of Cridland's other recommendations and provide access to 'Midlife Financial MOTs'. This will help those people who need to work longer before they receive their state pension to make smarter financial choices to boost their savings."

The rise in the state pension age has met with widespread criticism. Caroline Abrahams, charity director at Age UK, said it was "astonishing that this is being announced the day after new authoritative research suggested that the long-term improvement in life expectancy is stalling. For people in midlife and younger their state pension may seem a lifetime away but the fact is that the change announced today will have a real impact on them later in life."

Dave Prentis, general secretary of Unison, the public sector workers union said:

"This move is not based on people living longer. It's a cynical move to make many low-paid workers in the NHS and local government either wait longer for their pension, or take a pension cut if they finish work early."

However, some industry experts have come out in favour of such a move. Sir Steve Webb, former pensions minister said the government was "right not to have left this increase in the pension age until the mid-2040s."

Regardless of whether such a move is right or wrong, it will require many people to now reassess their retirement aspirations, provisions and planning.

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