Make Your Own Pension Provision

by Infinity

This cautionary tale will resonate strongly with women from the UK born in the 1950s, many of whom have taken to social media and supported petitions to the government to express their anger at the sudden changing of goalposts by the UK government, the country’s biggest pension provider. It also shows that relying on anyone but yourself to fund your retirement could be costly and turn up unpleasant surprises.

Huge numbers of women are affected by the changes to the State Pension Age (SPA) which were introduced by the 1995 Pension Act and the 2011 Pension Act. These changes increased the official SPA for women from 60 to 65, to bring it in line with that of men. Many women born on or after 6th April 1951 and approaching retirement are complaining at the unfair way that the changes were implemented with insufficient warning and the unexpected acceleration of the process. These factors combined have thrown the financial situation of thousands of women into chaos and in certain cases caused severe financial hardship.

Take the example of Claire, who was looking forward to retiring at 60. After the legislative changes, Claire will not now receive her pension until she reaches 65 even though she has paid in for the required 35 years. Not only will she not receive her pension during those five years, but during that extra half decade working she will have to pay thousands in additional pension payments. Claire estimates that, when you add up the lost income and the extra pension payments, the changes are costing her in excess of ￡50,000.

Another typical case is that of Anne who took early retirement in 2011 thinking that she would get her state pension when she reached the age of 60 in 2014 but subsequently received a letter in 2012 to say that her state pension date had been deferred to 2020. She finds herself forced to sell her home in order to survive as health problems mean she cannot return to her former career, even if she found someone willing to employ her in her sixties. Anne’s situation does seem particularly unfair when you consider that someone born a year before her and not affected by the changes could retire at 60.

The moral of the story is that you have to take control of your own retirement provision. Start from the perspective that you won’t receive anything from the government and work out your financial plan of saving and investing on that basis. It may well be that you will receive a state pension but, even if you do, the most you can currently get is ￡119.30 per week. That’s a nice bonus but certainly not enough for the kind of worry-free retirement you want. For that you need to take the matter into your own hands.

For further advice on saving and investing for a secure future, why not contact Alex who can help you put a watertight plan in place (so you don’t get any nasty surprises) and you can enjoy the retirement you deserve?

Get in touch with Alex here or at [email protected]

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Tilney (now rebranded as Evelyn Partners) is an award-winning financial planning and investment company that builds on a heritage of more than 185 years. They have won numerous awards and their clients include private individuals, families, charities and professionals. They presently look after more than USD70 billion.

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Get in touch with Alex here or at [email protected]