Older Women Are Poorer After Pension Age Change

Older Women Are Poorer After Pension Age Change
Over a million women in their early 60s are worse off after changes to the state pension age. Read our article in full on why older women are poorer…

Older Women Are Poorer

Research from the IFS (Institute for Fiscal Studies) found that women aged between 60 and 62 were, on average, £32 a week poorer.

Women in high-income homes experienced a 4% drop since the changes were made, but the biggest pinch was felt by those in low-income households who have been hit with a 21% reduction.

Taking other state benefits into account, women in this age group lost £4.2 billion a year on top of their previous state pension entitlements – equating to an average of £74 per week.

Jonathan Cribb, senior research economist at the IFS, said:

“While increasing the state pension age is a coherent response to the public finance challenge posed by rising longevity, it does place a further pressure on household budgets.

“It is important the government communicates the ongoing increases in the state pension age clearly so families can plan for their retirement as well as possible.”

Further Changes

The government recently announced it would increase the state pension age to 68 sometime between 2037 and 2039, meaning an estimated 5.8 million people born between 6 April 1970 and 5 April 1978 will remain in employment for an extra year.

Those born on or before 5 April 1970 will not be affected by the change.

Know your state pension age? We can help.

Financial assets push household wealth up 9%

Rising property prices and increasing pension pot values helped push household wealth up by 9% in 2016, research by Lloyds Bank found.  

The study claims household wealth soared to an estimated £10.5 trillion last year, up £892 billion from £9.6 trillion in 2015.

The total value of financial assets held by households, such as bank deposits, government bonds, life assurance and pension funds, contributed an estimated £461 billion to total household wealth.

Average house prices were also up by 4.9% and an additional 183,000 homes were added to the stock of private properties, which contributed £431 billion to the increase.

Sarah Deaves, private banking director at Lloyds Bank, said:

“For many people, their overall wealth is locked up in assets they hold for the longer term like their homes, their pensions, ISAs and investments.

“With rising house and equity prices, net worth has increased substantially in the past decade, growing by £143,000 per household on average.”

Value of Financial Assets 

Financial assets accounted for 57% of the £3.9 trillion rise in household wealth since 2006, equivalent to around £2.2 trillion.

Life assurance and pension funds accounted for 77% of the average household’s total financial assets, with a further 21% in the form of deposits held with financial institutions.

Deaves added:

“Increasing levels of personal wealth are clearly positive for many households, but with recent changes, it also highlights the increasing importance of proper financial planning, especially as people approach and move into retirement.”

Talk to one of our Warrington Estate Planning, Altrincham Estate Planning, Manchester Estate Planning, Liverpool Estate PlanningWilmslow Estate Planning or Knutsford Estate Planning specialist about your retirement.

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