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Pay and Pension

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 According to the Daily Telegraph we are going to be able to work into our retirement, claim a pension and still keep all our earnings.  The plan is to reduce the cost of retirement for our 'baby boomer' generation.

It seems that in a normal year about 650,000 people reach their 65th birthday, but in 2012 that number will increase by 150,000 to 800,000 as a result of the baby boomer explosion.  Obviously this is going to put even more strain on public finances at a very difficult time.  Government ministers are trying to find ways of pursuading people to postpone their retirement.

Under the current system, every pound you earn over £5 is knocked off your pension credit which means that a single person is guaranteed a weekly income of £132.60 and couples get £203.40.  If this rule was abolished you could keep on working for, let's say, an extra 5 years and start drawing a pension after 3 or 4 years on top of your earnings.  You would benefit from the extra income and the government would benefit from the delay in funding your pension.

The pensions minister, Steve Webb, has said that the retirement bombshell is about to go off and the government would like us to work a bit longer into our late sixties and then enjoy a later retirement with a bit more cash.

The state pension age is due to increase from 65 to 66 by 2026, but you can bet your pension that this will be accelerated.

As an aside, Aviva reckon that working adults in the UK will need to put away an avaerage of £10,300 per year to make sure they get a decent pension.  How many people do you know that could save £10,300 a year?

Use Retirement Revenue to find ideas to help you earn some extra money.

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