In today’s news it was announced that the State Pension age is soon to rise even faster than planned . Even worse, its expected to rise to 70 years.
This means people will not be able to access state pension until they are 70 years young.
Many do not know how much they need to save for retirement but the answer is simple, as much as you can sensibly afford.
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What is the state pension?
The State Penison is a regular payment from the givernment that is accessible to you once you reach the State Pension age.
The state pension age has changed so much in the last couple of years, so much so that their is now a dedicated website to check your state pension age. Be vigilant though, as the website says the State Pension age is under review, so you will have to check back again and again.
The full basic state pension is £137.60 per week and not everyone is eligible. According to nidirect “Under the rules, you’ll usually need at least 10 qualifying years on your National Insurance record to get any State Pension. You’ll need 35 qualifying years to get the full new State Pension. You’ll get a proportion of the new State Pension if you have between 10 and 35 qualifying years.”
Why is it changing?
It turns out the UK government is planing to keep people working to 70 because it cannot afford to foot the bill anymore. In simple terms, the fact that people are leaving longer is now costing the Government more than £100 billion a year.
Since we have an ageing population, the cost to the government cannot but increase, so what does the government do? It hikes the state pension age all in the name of making it ‘more affordable’ for itself.
What can you do about it?
The good news is that the hike is not expected to happen until 2040 (or at least so they say for now), so there is still time for you and I, to prepare ourselves for a future where we don’t have to depend on the state pension for survival.
To achieve freedom from the state pension, I encourage you to;
1. Save more in your workplace and personal pensions
2. Find ways to supplement your existing income so you can put more away for the future. There is so much on the web about ways to generate passive sources of income, leverage this information and start generating additional money to put away for the future
3. Plan your future with a mentality that the State Pension might not exist as chances are you might just be right
4. Start investing in your future now. Invest as much as you can afford in income generating assets such as stocks and real estate, so you have a regular source of income when you retire
5. Device clear investment strategies to make sure you are not working into your 70s.
Younger people must save all they can rather than rely wholly on the State Pension.
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