Change to state pension age impacts over-40s retirement plans

Only a quarter of homeowners over 40 say they will retire at their state pension age due to changes to state pension legislation, according to new research from Canada Life.

A study revealed that 31% of respondents plan to work beyond their state pension age, with this increasing to 50% of the over-60s.

Canada Life’s research, based on findings from 1,020 UK homeowners over the age of 40, also suggested that 34% plan to finish up work early and retire before their nominated state pension age, while one in ten (11%) said they had already stopped working before their state pension kicked in.

When asked what they expect their main source of income to be in retirement, 28% of homeowners aged 40 and above expect the state pension will provide the bedrock of their income, despite the full basic state pension currently standing at just £179.60 per week, or £9,350 per year.

Furthermore, the research also highlighted the lack of uptake of financial advice among over-40s, with just 28% planning on speaking to a financial adviser before making a decision about accessing their wealth in retirement.

“Many people are looking to rely on the state pension to provide them with income in retirement,” commented Canada Life technical director, Andrew Tully. “However, the amount received is not generous by any standard and as a result the onus is on individuals to take personal responsibility to save for retirement.

“As the goalposts for the state pension shift, it’s vital people check their state pension age, the amount they are due to receive and whether they are eligible for the full state pension.

“It’s equally important that those who have spent time out of employment check their record, claim any National Insurance credits possible, and think about making any top-ups in order to be entitled to as much state pension as possible. Taking a proactive approach, seeking the help of an adviser and making good decisions now will all help to fund retirements.”

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