The state pension has been in place for 105 years and seen a multitude of changes since launch. When first introduced in 1908, the maximum payment was equivalent to less than £20 and was only payable from age 70. What’s more, only 5% of the population was over this age. The meagre sum was means tested and only payable to those whose income fell below 12 shillings a week.
When first introduced, the government expected people at State Pension Age (SPA) to live just 9 years. Over 100 years later, this is now up to 24 years and longevity is increasing all the time. It is even estimated that 25% of all babies born in 2008 will live beyond age 100.
Now upon entering its second century, more changes are required to keep up with the changing times. Consequently, The Pensions Act 2011 will equalise State Pension Age (SPA) to 65 for men and women by November 2018. This will then increase to age 66 by October 2020 and in turn to 67 between 2026-28. These changes are particularly impactful for business owners who will now carry a huge administrative burden due to auto-enrolment.
Download our Guide to Pension Reform to understand what the changes mean for you as an employer or employee. In the guide we highlight when these changes will take effect, what your options are and how we can help at Lexington Wealth Management.