2.6 Million Over 50’s Expected to Delay Retirement
In this article, we'll look at:
- What’s the current retirement age in the UK?
- What do you get on a basic State Pension?
- Worried you can’t afford to retire?
- Find out what your pension actually is
- What is a workplace pension scheme?
- Benefits of delaying retirement
- Problems with delaying retirement
- Are you facing the prospect of retiring soon?
Since Covid 19, it’s been announced that 2.6 million over 50’s are considering delaying retirement directly due to the pandemic. This comes as many people faced redundancy, lost hours, and suffered from loss of pay. In 2021, more than 1.45 million were planning to delay retirement by at least 3 years. Many are concerned about when they’ll be able to afford to retire, or if.
Many of us fantasise about retirement on the beach in the Bahamas but unfortunately, that’s not always possible. If you’re thinking of delaying retirement, it’s time to look at your options.
What’s the current retirement age in the UK?
The current state pension age, for both men and women, is 66 years old.
This will gradually increase again from 2026.
What do you get on a basic State Pension?
Born before 6th April 1953 £137.60
Born on or after 6th April 1953 £179.60
Born before 6th April 1951 £137.60
Born on or after 6th April 1951 £179.60
Worried you can’t afford to retire?
If you’ve been affected by Covid-19 or don’t feel like you’re in a comfortable position financially, the idea of retiring soon might be worrying.
The best thing to do is to start with a realistic budget for your retirement plans. What are your outgoings? Could you afford to live on the basic state pension? What extra will you receive on top of the state pension if anything?
Find out what your pension actually is
You can see the amount anywhere online for the basic state pension, but many of us will have extra built up in pension schemes from workplaces. If you’ve ever opted into a pension scheme, even if it was several years ago, that money will go toward your retirement.
Check online to see how much you’d be living off.
What is a workplace pension scheme?
Often, you’ll have paid into this through work, it’s deducted from your pay check before you receive it, like with National Insurance or tax. Have a look through your payslips to see if you’ve been paying into one.
Most workplaces will pay into your pension scheme as well, adding to what you could be entitled to.
Benefits of delaying retirement
You could get more. Your state pension will increase every week you defer. As long as you defer for a minimum of 9 weeks or more.
It will increase by 1% per 9 weeks, which equates to around 5.8% for every year – this is around an extra £10.42 per week if you delay retirement for a year. This will continue to go up each year you delay retirement.
Problems with delaying retirement
The obvious problem with delaying retirement is that you’ll need to keep working. For some, with health issues, that might not be an option.
In these situations, you could be entitled to benefits such as Attendance Allowance which is for people over the state pension age who have a disability that requires them to have a carer or someone helping them.
Issues could arise if you are looking after a spouse or another person who faces health problems in older age. In this situation, you may be able to get help from the government in this case as well.
Are you facing the prospect of retiring soon?
Need to let us know you’re retiring soon? Or expecting any other change in your finances? If you need to make a change to your Debt Management Plan (DMP), let us know by speaking to a member of our team.
A DMP is supposed to make repaying your debts easier, not harder; and if you can’t afford the normal amount each month that you pay, contact us. We will run through your options, which will include a change in payment amount and us looking at alter-native solutions options for you.
And our team of experts are always here for debt advice.Speak to us today