Many people especially women nowadays will have to toil at work for 50 years before they can retire as the age at which you receive your state pension keeps on shifting.
Last week Anna Mikhailova found out when she will receive her state pension, something that generations of women before her received at the age of 60. By using the government‘s online calculator Anna discovered that she would receive £155.65 a week, or £8121.59 a year when she reaches the age of 68. Under the rules that came into force in the last couple of months, people must have made 35 years of national insurance contributions to qualify for the full amount.
This will not come as a surprise, as this current generation is constantly being reminded that they will be working for longer, receiving less than the generation before them, taking longer to get on the property ladder and relying on 35-year mortgages. People are also sceptical that the retirement age will stay the same as the system is currently under review and is more likely to be heading to around 70 before you can retire.
The fact that you might have to work until you are 70 is causing concern for some members of the public as they might not be fit and able to work till 70 and are worried that they won’t receive their full pension because of this. Women born in the 1950’s were told that they would be able to retire at 60 but now have to wait until the age of 66. A colleague of Anna’s has worked full time for 40 years and when she started was told she would be able to retire at 60, but this has recently been revised to the age of 65 in response to this she said “you plan your life and then they change the rules”.
Patrick Connolly from the financial adviser Chase de Vere cautions that “in its current form, the state pension is simply unaffordable in the long term and it may be that more radical changes are needed in the future” After all the state pensions that were forecasted in the 1950s turned out to be wildly misleading.
Many say that it would be impossible to live on £155.65 a week, as in Anna’s case even though she would have hopefully paid off the mortgage, her other big bills electricity, gas, water and council tax add up to nearly £400 a month. Her advice to people is that if you want to treat yourself to holidays or cover unexpected costs when retired you need to start saving now and make other arrangements so you aren’t dependent on the state pension.
If you have any concerns contact us for further advice.
Information provided by the Sunday Times: The Times & The Sunday Times
Government Website : Check your State Pension
Picture from: Retirement