Change to retirement age
John Lawson, head of pension policy at Standard Life, said: "Last year we predicted that an increasing state pension age was likely to be an ongoing trend in the years ahead. Now the Chancellor has confirmed this is to be the case and we should brace ourselves for having to work much longer in the future. Unless we save a lot harder and are able to retire on our private pensions when we want to, many of us will still be working well into our seventies.
"Some people are bound to be thinking that 'this won't really affect me - I'm still going to aim to retire at 60 or 65 anyway'. But if people want to take control of their retirement age and be retired for longer, without the support of the state pension in the early years, they'll need to start planning and investing much more now. This isn't easy in the current environment, but it's something to be thought about very seriously, as every little helps when it comes to investing for the future.
"There are already two increases to state pension age scheduled for 2019 and 2026. If after 2026 the state pension age increases in line with our changing life expectancy, we could expect that someone who is currently 37 won't be able to start drawing their state pension until they are 70 and someone who is 21 won't receive it until they are 75. This means that children born in 2012 are unlikely to get their state pension until 80, if life expectancy at retirement rises in line with last the 30 years."
"This is a massive change for everyone, but women in particular are having to make a big psychological adjustment as their state pension age is leaping forward."
The two increases already planned for 2019 and 2026, followed by increases every 5 years thereafter
Pensions Tax Relief
John Lawson, head of pension policy at Standard Life, said:
"We're pleased that the Chancellor has not made a change to tax relief on pensions contributions. This valuable incentive encourages more people to save for their retirement years. Tax relief on qualifying contributions into private pensions means that a £100 investment made by a basic rate tax payer is automatically topped up to £125. And if you are a higher rate tax payer you can still claim the higher rate tax rebate too. This tax incentive encourages many to make the most of pension contributions now, so they can make the most of their retirement in the future."
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