by Rachel Efetha

The state pension age (SPA) is the age at which you can start drawing your state pension – and it’s getting later and later.

For a man it is currently 65 and for a woman it will be 65 from November 2018; in the meantime women’s SPA is gradually getting later and is just over 61 right now. After November 2018, men and women will both see a gradual increase to 66 by October 2020. Further rises are planned from 2026 onwards.


You might think that very few people would want to work after the date when their state pension starts to be paid – whenever that might turn out to be. In fact, it turns out that a surprising number of people continue to work after reaching SPA. Some 1.4 million people were working beyond their SPA towards the end of last year, according to the Office for National Statistics (ONS). This represented about one in eight state pensioners, and the proportion of working pensioners has generally been rising since 1999.
There are several good reasons for this, and some of them could affect you.

  • Most of us are living longer, more healthy lives than previous generations did. We are therefore more capable of continuing to work, especially into our 60s and early 70s.
  • We need to top up our state pensions. The basic state pension is far from generous: it is currently just £107.45 a week for a single person. Even with the top-up provided by the Pension Credit guarantee, the total is only £142.70 a week – not even enough to attract income tax.
  • Self-employed people need to keep working longer than their employed counterparts. The self-employed do not accrue any additional state pension benefits (e.g. S2P) during their self-employment and, by definition, are not members of an employer’s pension scheme (other than one they set up for themselves). They form 32% of the post-SPA working population, against 13% in the pre-SPA workforce.
  • Many pension schemes are becoming less adequate and need topping up. Final salary pension schemes are fast disappearing from the private sector. Their replacements generally have significantly lower employer contributions, and so lower retirement benefits.
  • Lacklustre performance from many investment markets has limited the growth of pension fund values.
  • Annuity rates have fallen significantly over the years, and low interest rates have hit pensioners’ returns from banks and building society deposits.

Working past your SPA should be a personal choice rather than a financial necessity, so having enough to fund your retirement income should be at the forefront of your planning priorities.

Estimating your eventual total retirement income can be difficult, especially if you are some way off your SPA. This is where an Independent Financial Adviser can help. They will analyse all your potential sources of retirement income and project the likely returns, based on a variety of assumptions about earnings growth, price inflation and investment returns. We usually find that people need more retirement income, and we can then suggest options to make good the shortfall.

Why not ask for an assessment now? The alternative could be working past age 65, or 66, or 67…

A pension is a long-term investment, and the value of your investment can go down as well as up. Past performance is not a reliable indicator of future performance. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation.

Rachel Efetha is an Independent Financial Adviser at AWD Chase de Vere.  She can be contacted on 07894 619793 or

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