Retirement

This coming Sunday is Pensions Awareness Day – an initiative to raise awareness of retirement planning.

This weekend, on Saturday 6th July, the state pension age rises again, to 65 and 5 months. Naturally, this means that some will have to wait longer to receive their state pension. But it also means that some with low incomes must wait longer to receive ‘Pension Credit’ – a means-tested benefit that aims to provide pensioners with a ‘minimum income’.

Automatic enrolment is a key government policy to help employees save privately for their retirement. We find that it substantially increased workplace pension participation among those working for small employers by around 45 percentage points to reach 70% of targeted employees – with most, but not all, brought in at relatively low rates of pension saving.

On 6 March the state pension age for men and women reaches 65 and 3 months. As well as reducing government spending the increases in the female state pension age since 2010 have led to some – but not most – remaining in paid work for longer. Here we provide more detail on what the impact of the rising state pension age is likely to be.

Since 2000, all households containing a person aged 75 or over have been entitled to receive a free TV licence, paid for by the government. From June 2020 onwards, the government will no longer provide the funds for these free TV licences and the BBC therefore has to decide whether to continue to provide free licences to all over the age of 75 from within its own funds. In this short observation, which will be submitted to the BBC as part of wide consultation, we look at incomes and poverty rates for the over 75s and how this has changed since free TV licenses were first introduced.

From tomorrow, a large proportion of private sector employees will pay more into their pensions – and their employers will have to contribute more too. This is the first of two planned steps in the next two years that will increase the minimum contributions that most employees and their employers will, by default, make to a workplace pension. This is all part of the government’s automatic enrolment policy aimed at increasing retirement saving.

The Department for Work and Pensions today published the recommendations of its review into automatic enrolment. This focussed on issues around membership of, contributions to, and engagement with, workplace pensions. This observation looks at two specific measures – both of which are likely to boost the amounts going into workplace pensions – and the proposed trials of ways to boost pension saving among the self-employed who are not covered by automatic enrolment.

An IFS observation.

You might have a different set of objectives when choosing how to uprate the state pension, and different objectives could lead to different choices. But whatever your objectives, neither the triple lock nor the double lock is the right answer.