State pension reforms needed to prevent poverty spiralling
- On June 22, 2023
- By GrowthInvest Marketing
Phoenix Group has called on the government to introduce early access to the state pension for those with a terminal illness, among other reforms, ahead of the proposed increase in the state pension age from 67 to 68.
In a report released today (June 20) from Phoenix Group, the organisation’s think tank highlights that nearly 7mn people will be impacted if the state pension increase to age 68 is brought forward to 2037.
Phoenix has said that delaying access to the state pension – coupled with widespread under-saving – creates the “perfect storm” for worsening poverty among people in later-life.
It noted that of the 7mn who will be affected by the rise in state pension age, 44 per cent of defined contribution savers are not on track for their planned retirement lifestyle.
In addition to this, the report also highlighted a significant lack of understanding around the state pension among the general population, with many people believing that national insurance contributions are kept in a ‘personal pot’ accessed when they reach state pension age.
Phoenix Insights head of research and policy Patrick Thompson said policy interventions are needed to rectify these issues.
“The state pension is an important intergenerational contract, but not everyone knows what they’ve been signed up to. Our research shows that knowledge of the state pension is poor, and people are worried that they may not receive the same benefits as today when they reach their retirement age,” Thompson said.
Looking further ahead Phoenix also highlighted what it called “serious questions of intergenerational fairness”.
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