New state pension rules
What impact will the changes to the state pension rule that take effect next month have on you?
Big changes are in the works for the state pension system because we are living longer and there are fewer people of working age to support the retired population. By the year 2046, the state retirement age will have risen to 68.
Some changes will take effect when the new tax year begins on April 6 2010. Over the next 10 years, the state retirement age for women will go up to 65, thus making retirement age for men and women eventually equal.
Only women who turn 60 between now and April 5 will be able to retire on their 60th birthday. Those born after this date will have to wait – if you are 60 on April 6, you will have to wait until May 6 before you can retire. This strategy will be used to lift the retirement age for women so that it is 65 by 2020.
Although the state retirement age is 60 or 65, if you have a personal pension or are part of a company plan, you don’t have to wait until you are that age to draw it. However, with the new rules the age at which you can access your pension will go up from 50 to 55 from April.
That means if you’re over 50 but under 55, you have a few weeks left in which you could opt to draw your pension. After April 6, that choice will be gone until your 55th birthday.