This week we received the news that for six million people the age at which the State Pension can be drawn has increased by a year.
The change will affect those born between 06/04/1970 and 05/04/1978 with the Government saying the new rules would save the taxpayer £74bn by 2045/46 (Source: BBC Website 19.07.2017).
With increasing life expectancy this change whilst disappointing to those affected (me included) comes as no real surprise.
This is a perfect example of why financial planning is a process and not an event. The financial plans we build are only ever really "draft" as they make many assumptions (the age at which state pension is drawn being just one). What is crucial, however, is to review and monitor the plan to adjust to the real world changes.
For example, this change will likely have a negative impact on the lifetime cashflow of the financial plan. The options in light of this could be:
The BBC website made the statement that:
" Six million people in their early 40s will have to work a year longer, as a result of a change in the state pension age, the government has announced. " (Source : BBC Website 19/07/2017)
Will people "have" to work a year longer? Possibly so but "course correcting" a financial plan is a way to deal with the inevitable changes that life throws at us.
Have a great weekend
This article should not be considered investment advice or an offer of any product for sale, it contains the opinions of the author but not necessarily the Firm and does not represent a recommendation of any particular, strategy or investment product. Information contained has been obtained from sources believed to be reliable, but is not guaranteed. Past performance is not an indicator of future results.