State pension age changes explained, by Ascot Lloyd

#StayInTouch

3rd October 2018

Okay so this is not news, and nothing has changed recently in relation to the timetable for increasing state pension age; however, a potentially momentous event will take place on 6 December 2018 that you should be aware of and may well need to take action on as a direct result.

Much has been written about the changes in state pension age and indeed the change of age for women has been ongoing since 2010. Full equalisation of state pension ages at age 65 will be complete on 6 December 2018 and from this date the next stage of increasing state pension ages for all (ultimately to age 68 under current legislation) will begin.

For the next few years it will become much more difficult for you to be certain of what your state pension age is, as initially this most likely will not coincide with your birthday. A table of when you will attain state pension age is attached later in this document or alternatively you can establish when your date is by checking on www.gov.uk/state-pension-age.

The purpose of this briefing however is not just to highlight that you may find it difficult to assess your own state pension age, but to draw your attention to the implications that this may have on various pension and employee benefit arrangements you may have for your employees.

You will be aware that as a result of the European Court judgement handed down on 17 May 1990 (the Barber judgement) pension ages could no longer be treated unequally, which led to a standard retirement age being set by employers for both male and female employees. However, the Employment Equality (Repeal of Retirement Age Provisions) Regulations 2011 then subsequently abolished default retirement ages with effect from 1 October 2011.

Whilst the impact of this latter legislation meant that contractually for most employers (unless you could objectively justify otherwise) the concept of a fixed retirement age disappeared, this was not the case for a raft of pension and employee benefit products. Put simply, a number of these products still required a nominal ‘retirement’ date for the purposes of illustrations or cessation of cover (insurers do not like open ended liabilities!).

Typically, but by no means exclusively, this nominal retirement age was set at age 65 for both males and females.

From 6 December 2018 the state pension age will no longer be age 65 for any new retirees and therefore you do now need to consider the impact of continuing with a nominal retirement age of 65 on your pension and employee benefit products.

We have set out below the type of potential issues that this might cause for different pension types and how you may deal with this.. As ever, please refer directly to your Ascot Lloyd consultant to discuss how this specifically impacts on your arrangements or if you are not already an existing client and would like a free, no obligation assessment please call us on 0345 345 5111 or email at This email address is being protected from spambots. You need JavaScript enabled to view it..

Issue/Impact	Consider
Defined contribution pension schemes
Lifestyle default arrangements are designed to begin de-risking investments X years from age 65 – members may de-risk investment strategy too early as a result potentially significantly affecting final fund value. Statutory Money Purchase Illustration (SMPI) statements may still be set as age 65 and are therefore unlikely to be reflective of retirement intentions.	Consider target dated funds as an alternative to traditional lifestyling. Take opportunity to assess whether existing lifestyling options reflect pension freedoms. Consider whether unilateral amendment of nominal retirement age is appropriate for illustration purposes. Consider member education strategy to encourage self-selection and ownership. Review communication material (own trust) – are the new ages and implication thereof clear? Understand Group Personal Pension and/or Master Trust communication material – are the new ages and implication thereof clear? If not, what is providers proposition for amendment – is Provider still best choice? Take opportunity to review.
Group life assurance schemes
Cover age may have been set as 65 – if so company may need to self-insure risk between 65 and state pension age.	Be clear about terms of benefit as mentioned in contracts. Consider amending terms to run to state pension age, alternatively age 70 termination dates for cover are now widely available.
Group income protection scheme
Cover risk Cover age may have been set as 65 – if so company may need to self-insure risk between 65 and state pension age. Term risk Term may have been set as payable until age 65 – if so company may need to make additional payments between 65 and state pension age.	Be clear about terms of benefit as mentioned in contracts. Consider amending terms to run to SPA, alternatively age 70 termination dates for cover are now widely available. Consider suitability (and cost) of obligation – term assurance policy (ceasing at SPA where necessary) may be more appropriate.
Other employee benefit schemes
Same issues as above in terms of cover period – if this is set to 65 you may need to self-insure between 65 and SPA.	Review cover period – take opportunity to consider whether plans are still appropriate/valued.

Ascot Lloyd has spent a lot of time over the last few years delivering pension education seminars to pension scheme members and can attest that the issue of retirement and state pension ages is prevalent in all seminars. You should not under estimate the impact this change may have on your employees.

Women’s state pension age rising from 60 to 65

Date of birth	State pension age
6 April 1950 – 5 May 1950	6 May 2010
6 May 1950 – 5 June 1950	6 July 2010
6 June 1950 – 5 July 1950	6 September 2010
6 July 1950 – 5 August 1950	6 November 2010
6 August 1950 – 5 September 1950	6 January 2011
6 September 1950 – 5 October 1950	6 March 201
6 October 1950 – 5 November 1950	6 May 2011
6 November 1950 – 5 December 1950	6 July 2011
6 December 1950 – 5 January 1951	6 September 2011
6 January 1951 – 5 February 1951	6 November 2011
6 February 1951 – 5 March 1951	6 January 2012
6 March 1951 – 5 April 1951	6 March 2012
6 April 1951 – 5 May 1951	6 May 2012
6 May 1951 – 5 June 1951	6 July 2012
6 June 1951 – 5 July 1951	6 September 2012
6 July 1951 – 5 August 1951	6 November 2012
6 August 1951 – 5 September 1951	6 January 2013
6 September 1951 – 5 October 1951	6 March 2013
6 October 1951 – 5 November 1951	6 May 2013
6 November 1951 – 5 December 1951	6 July 2013
6 December 1951 – 5 January 1952	6 September 2013
6 January 1952 – 5 February 1952	6 November 2013
6 February 1952 – 5 March 1952	6 January 2014
6 March 1952 – 5 April 1952	6 March 2014
6 April 1952 – 5 May 1952	6 May 2014
6 May 1952 – 5 June 1952	6 July 2014
6 June 1952 – 5 July 1952	6 September 2014
6 July 1952 – 5 August 1952	6 November 2014
6 August 1952 – 5 September 1952	6 January 2015
6 September 1952 – 5 October 1952	6 March 2015
6 October 1952 – 5 November 1952	6 May 2015
6 November 1952 – 5 December 1952	6 July 2015
6 December 1952 – 5 January 1953	6 September 2015
6 January 1953 – 5 February 1953	6 November 2015
6 February 1953 – 5 March 1953	6 January 2016
6 March 1953 – 5 April 1953	6 March 2016
6 April 1953 – 5 May 1953	6 July 2016
6 May 1953 – 5 June 1953	6 November 2016
6 June 1953 – 5 July 1953	6 March 2017
6 July 1953 – 5 August 1953	6 July 2017
6 August 1953 – 5 September 1953	6 November 2017
6 September 1953 – 5 October 1953	6 March 2018
6 October 1953 – 5 November 1953	6 July 2018
6 November 1953 – 5 December 1953	6 November 2018

State pension age will therefore be equal for both females and males effective from 6 December 2018.

Increase in State Pension age from 65 to 66 for both females and males

Date of birth	State pension age
6 December 1953 – 5 January 1954	6 March 2019
6 January 1954 – 5 February 1954	6 May 2019
6 February 1954 – 5 March 1954	6 July 2019
6 March 1954 – 5 April 1954	6 September 2019
6 April 1954 – 5 May 1954	6 November 2019
6 May 1954 – 5 June 1954	6 January 2020
6 June 1954 – 5 July 1954	6 March 2020
6 July 1954 – 5 August 1954	6 May 2020
6 August 1954 – 5 September 1954	6 July 2020
6 September 1954 – 5 October 1954	6 September 2020
6 October 1954 – 5 April 1960	66^th Birthday

Increase in State Pension age from 66 to 67 for both females and males

Date of birth	State pension age
6 April 1960 – 5 May 1960	66 years and 1 month
6 May 1960 – 5 June 1960	66 years and 2 months
6 June 1960 – 5 July 1960	66 years and 3 months
6 July 1960 – 5 August 1960	66 years and 4 months
6 August 1960 – 5 September 1960	66 years and 5 months
6 September 1960 – 5 October 1960	66 years and 6 months
6 October 1960 – 5 November 1960	66 years and 7 months
6 November 1960 – 5 December 1960	66 years and 8 months
6 December 1960 – 5 January 1961	66 years and 9 months
6 January 1961 – 5 February 1961	66 years and 10 months
6 February 1961 – 5 March 1961	66 years and 11 months
6 March 1961 – 5 April 1977**	67^th Birthday

**Under the current law, the state pension age is due to increase to 68 between 2044 and 2046. Following a recent review, the government has announced plans to bring this timetable forward. The state pension age would therefore increase to 68 between 2037 and 2039 as follows:

Date of birth	Proposed state pension age
6 March 1961 - 5 April 1970	No change – i.e. 67^th Birthday
6 April 1970 - 5 April 1978	Proposed to increase to between 67 years and 1 month, and 68 years, depending on date of birth
After 6 April 1978	No change. Your state pension age remains 68