Overhaul of pensions and retirements launched

Wed, 31 May 2006

The government this week embarked on plans to bring into effect key changes to existing pensions and retirement schemes.

Men, who currently collect state pensions at 65, will not be entitled to receive their old age benefits until the age of 68 - reflecting an increase in life expectancy and a consequent increase in pension costs to the government. Longstanding plans to increase the age of retirement for women from 60 to 65 will be acted upon incrementally between 2010 and 2020.

Ian Naismith, pensions head at Scottish Widows commented that the new changes would be likely to hit the poor harder than the rich because, "[they] tend to die younger". He continued, "if you look at the broader demographics, this move is inevitable".

The changes are likely to encourage those who have retired early to require savings before they become eligible for state pensions, says Helen Kanolik of Heliting Financial Services, "many people retire ahead of state pension age. we'll see more of this".
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