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Press comment: State pension age reform prompts shift to longer working lives

12/09/2019

If you are covering the latest Department for Work and Pensions data on the age 50+ labour market, please see the following commentary from Quilter head of retirement policy, Jon Greer:

Jon Greer“Changes to the state pension have evidently had a significant impact on working patterns, particularly among women. Reforms to the state pension age for women have seen it increase from 60 to align with the age at which men can receive state pensions benefits. This is reflected in a significant increase in the number of women working into their 60s, with more women now in employment between 60 and 65 than not in work.  In the 90s and 2000s, women were, on average, retiring from work in their early 60s, but that has steadily crept up and the average age of retirement is now just over 64 years old – the highest it has ever been.

“Amongst men, the average age for someone to exit the labour market is currently just over 65 years old, but it has increased more gradually. And it is still below the peak average age for leaving the workforce, which was 67 in the post-war era.

“Further increases in the state pension age are already scheduled in, with retirees having to wait till age 68 before receiving their state pension benefits. This change is currently expected in the late 2030s if parliament passes the required legislation, but it could easily be brought even further forward in the future. One policy think tank recently even suggested raising the state pension age to 75.

“The gradual increase in the state pension age is driven by demographic changes. An ageing society that means there are fewer and fewer working age people for every person in retirement. In the context of the state pension, that creates an acute funding challenge because the state pension is run on a pay-as-you-go basis, with the government paying the state pension directly from tax revenues.

“It means that for those planning their retirement it is crucial to check your expected state pension age and entitlement to ensure you can make informed decisions. You may find your state retirement age is later than expected, or that you’re set to receive less than the full pension if you have any gaps in your national insurance record. And it is crucial to recognise that the long-term trend underpinning all this is that the government is growing less able to support retirement funding, gradually increasing our own individual personal responsibility for meeting the cost of retirement.”

For more information contact

Kathleen Gallagher023 8072 629307990 004932kathleen.gallagher@quilter.com

Notes to Editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £118.4 billion in investments (as at 30 June 2019).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions; and discretionary fund management.

The business is comprised of two segments: Advice and Wealth Management and Wealth Platforms.

Advice and Wealth Management encompasses the financial advice business, Quilter Financial Planning; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

Wealth Platforms includes Old Mutual Wealth UK platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

The Quilter plc businesses are being re-branded as follows: 

  • Quilter Financial Planning (previously Intrinsic)
  • Quilter Private Client Advisers (previously Old Mutual Wealth Private Client Advisers)
  • Charles Derby Group (becoming Quilter Financial Advisers)
  • Quilter Financial Adviser School
  • Quilter Cheviot
  • Quilter Investors
  • Old Mutual Wealth (becoming Quilter Wealth Solutions in 2020)
  • Old Mutual International (becoming Quilter International in 2020)

This press release is for journalists only and should not be relied upon by financial advisers or customers.

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This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.